Natural Gas Price Forecast: Stuck Within Friday’s Price Range

Natural gas opened higher on Monday with an opening gap. It then traded within a relatively tight range in the upper half of Friday’s trading range the remainder of the day. This follows a bearish weekly close on Friday as the price of natural gas ended in the lower half of the week’s range and below the prior swing high of 3.16. It remains to be seen whether natural gas can maintain strength into a new trend high. Last week’s high of 3.56 is the current trend high.

Inside Day Provides Price Levels

Once Monday’s session is complete, pivots are at the day’s high of 3.46 and the low of 3.26. A decisive move through either has the potential to lead to a continuation in the same direction. Moreover, be cautious of false breakouts, either up or down, that quickly reverse back into today’s trading range. Natural gas rallied above three key pivots last week, indicating improving demand.

The series of lower swing highs are components of the upper boundary of a large symmetrical triangle pattern. At the same time, once the trend high of 3.56 was hit last Friday it led to a bearish engulfing day with natural gas closing below the prior day’s low after exceeding the prior day’s high earlier in the session.

Strong Advance Takes a Rest

Last week’s rally exceeded the top of a previously identified resistance zone with a high of 3.45. A decisive rally above today’s high will put natural gas in a position to possibly challenge last week’s high of 3.56. A little above that high is another potential resistance zone from 3.64 to 3.67. That zone is anchored by previous resistance at the peak for 2023 at 3.64. If natural gas can get above there, it will be trading at its highest price in around 22-months.

Weakness Points to 3.15 Next

Alternatively, a drop below today’s low will likely see further testing of lower support levels. Given the bearish engulfing day last Friday and weak close, it wouldn’t be surprising to see another test of Friday’s low of 3.07. Also, watch the 3.15 swing high area on the way down for possible support. Other key potential support areas include the prior swing high at 3.02 and the 20-Day MA at 2.90.

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