Natural Gas Price Forecast: Surges Past Key Levels, Eyeing Higher Targets

Natural gas triggered an upside breakout on Wednesday as it surged above the 3.02 swing high from early-October. At the time of this writing, the high of the day was 3.23, and it continues to trade strong, near the highs of the day. The low of the day was 2.94. A strong close would put it in a solid position for a continuation higher.

Nonetheless, the breakout was decisive, partly due to the sustained buying seen reflected in the day’s long range green candle and likely strong close. But there was also a second breakout above the June swing high of 3.16 that confirmed strength. A daily close above that level today will further indicate improving demand. In addition, a daily close above 3.16 will be the highest daily closing price in 54 weeks.

Strong Breakout of Symmetrical Triangle

Today’s strong rally triggered a breakout of a large symmetrical triangle pattern, and it will be confirmed on a daily close above 3.02. Also, the continuation of two rising ABCD patterns, one light blue and the other in purple, occurred on the advance above 3.02. And there was a third ABCD pattern (orange) that triggered a continuation of the pattern on the move above 3.16. The three patterns are a good example of the fractal nature of price patterns.

First Target (minor) Hit

A first target at 3.22 was reached today and tested as resistance. So far, there is enough resistance to stop the advance, if natural gas ends today with that high price. That price target is the initial projection from the near-term light blue rising ABCD pattern. Since it is the smallest structure of the three ABCD patterns, it had the greatest chance of being reached.

Since the triangle pattern is a long-term pattern that has been forming for some months, the bullish reaction from the breakout may overrule potential resistance at the first target for the smaller pattern. Bullish momentum seen today could continue to the next higher potential resistance from around 3.35 to 3.45. That price zone is found at the confluence of four projected price levels.

Monthly Breakout Confirms Strength

The 3.02 swing high was also the monthly high from October. Therefore, a monthly trend continuation signal occurred today. The dominant trend is seen in the monthly pattern as it can influence price patterns in the shorter time frames.

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