Natural Gas Price Forecast: Rebounds, Targets 200-Day MA Amid Bullish Momentum

Natural gas dipped lower earlier on Monday before finding support at the 20-Day MA and turning up. It has since established a reversal day as it has risen above Friday’s high following a drop below the low of Friday. The low for the day was 2.10 and the 20-Day line is at 2.10. At the time of this writing natural gas continues to trade near the highs of the day, currently 2.245, and above Friday’s high of 2.22. Strength seen today should be followed by further signs of strong upward momentum.

Bullish One-day Reversal

Given today’s bullish reaction following a successful test of support at the 20-Day MA, the pullback in natural gas is likely complete. The developing uptrend should be ready to attempt to recapture the 200-Day MA on a move above 2.33. That level can be combined to show a potential price resistance range from 2.33 up to the 50-Day MA at 2.38. In between is the 38.2% Fibonacci retracement at 2.37. Together, a range from 2.33 to 2.38 is identified.

Rise Above 2.30 Triggers Bull Continuation

An advance above the recent swing high of 2.30 will trigger a continuation of the rally that began from the recent 1.88 swing low. It will follow a pullback to the 50% retracement zone. Active investors may use the first pullback off a bottom as it can be one of the better locations to get a stronger reward to risk ratio. Downside is limited to the low of the pullback, while upside is relatively more significant. However, there are technical indications pointing to higher prices.

New ABCD Pattern Targets 2.52

A new swing low is established today, assuming it is retained as support. This allows for a new rising ABCD pattern or sequential measured moves (orange) to be established. A larger rising ABCD pattern is shown in purple with a long-term target of 3.46. The new and smaller ABCD pattern shows an initial target of 2.52 and a 127.2% extended target of 2.63. Notice that the first level is associated with the 50% retracement (green). Meanwhile, the extended target is near the 61.8% Fibonacci retracement at 2.67. Together they generate a price range from 2.63 to 2.67.

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