Natural Gas Price Forecast: Surges as Upward Momentum Gains Strength

Natural gas blasted higher on Monday, triggering a continuation of the rising trend and a breakout above a potential resistance zone that ended at 2.54. It reached a high of 2.63 for the day, at the time of this writing, and it is well on its way to the next target zone that looks to be from around 2.65 to 2.67. Also, improving strength in demand for natural gas was indicated by the crossover today of the 20-Day MA (purple) above the 200-Day MA (blue).

Momentum remains strong late in the day as it continues to trade near the highs of the day. This will put it in a good position to end in the top quarter of the day’s trading range. Notice that the day began with signs of strength as there was no pullback into Friday’s trading range before buyers took back control. Given a likely strong close upward momentum may remain strong over the next few days.

Looks to be Heading Towards 2.65 to 2.67 Price Zone

As of today’s high, the price of natural gas was up by 0.76 points or 40.5% from the late-August low. The next higher target range for natural gas is around the Fibonacci confluence zone from 2.65 to 2.67. It is followed by an estimated target from the double bottom pattern that initially triggered two weeks ago. Upward momentum is improving as the advance progresses and today is the beginning of the fifth consecutive week of higher weekly highs and higher lows since the August 27 bottom.

Monthly Chart Confirms Strength

Today’s advance triggered a monthly breakout above the July high of 2.60. It follows a bullish reversal earlier this month as natural gas broke out above the August high of 2.30. That breakout also triggered the double bottom pattern on the daily chart. Since the monthly pattern is further confirming strength there is a possibility that the 3.16 swing high from June 11 is eventually challenged.

The developing monthly pattern shows one upswing (to the 3.16 high) and one pullback that generated a higher swing low for August. However, to approach the 3.16 high natural gas must first breakout above the top downtrend line. Currently, that line is around the 78.6% retracement at 2.89.

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