Natural Gas Price Forecast: Struggles at Support – Will Bulls Hold the Line?

Natural gas fell to a new retracement low of 3.06 on Wednesday before bouncing. It got close to testing support around the prior symmetrical triangle breakout level at the prior swing high of 3.02. Nonetheless, today could have been the test depending on what happens next. That price area is further identified by the 61.8% Fibonacci retracement at 3.03. At the time of this writing, natural gas reached a high of 3.19 and it continues to trade near the highs of the day.

If 3.02 Fails, 2.67 Looks Possible

line of a large symmetrical triangle becomes a potential target, and further down is the 78.6% retracement at 2.67. Currently the 200-Day MA has converged with the retracement level and is identifying the same price. Nonetheless, the 200-Day MA marks a key potential support level for the larger bull trend.

Large Rising Parallel Trend Channel

A key point to consider is the presence of a large rising parallel trend channel on the chart. Notice that during the recent rally there was a failed attempt to break out above the top channel line before a high was established at 4.37. Given the subsequent bearish decline follow through the possibility of an eventual test of support at or near the lows of the channel are a possibility. Once there is a clear reversal from one side of the channel, there is the possibility of reaching the other side of the channel.

20-Week MA Tested as Support

Further to the above analysis, the weekly chart may provide an additional clue. Today’s low reached a seven-week low and there is also a monthly low from December at 2.98. The decline also tested support around 20-Week MA, which is at 3.11. The 20-week line has marked trend support on the weekly chart since it was reclaimed in October.

This seems to increase the chance that today’s low could hold as support and complete the correction. It also indicates that a decisive decline below the 20-Week MA will provide bearish confirmation and increase the chance for natural gas to eventually test lower prices before the correction is complete.

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