Natural Gas Price Forecast: Targets 50% Retracement Amid Growing Bullish Momentum

Natural gas continued to rally on Thursday as it reached a new counter-trend high of 2.56. It exceeded the 38.2% retracement and continued to strengthen. Although yesterday’s close was at resistance of the 50-Day MA, natural gas should close above the 50-Day line today. That will provide a new bullish sign reflecting growing strength in the uptrend. At the time of this writing natural gas continues to trade near the highs of the day and could yet reach the next target before the close today.

Next Target is 2.52

The 38.2% Fibonacci retracement at 2.52 was easily exceeded today putting natural gas in line to test resistance around 50% retracement at 2.615. That price area is strengthened by the 20-Day MA (purple), which is currently showing the same price level. The 20-Day line reflected support of the prior uptrend following the September 3 upside breakout of the line. It failed to maintain support once the price of natural gas closed below it on October 11. Now, it presents a potential area of resistance. Plus, once the 50-Day MA is cleared, as occurred today, the next moving average in the sequence becomes an upside target.

61.8% Fibonacci Retracement at 2.71 Looks Likely

Nonetheless, since this week’s swing low was higher than the previous swing low, the current advance has the potential to eventually exceed the 50% retracement and target the 61.8% Fibonacci retracement at 2.71. An unfilled gap begins at 2.66 and goes to 2.72, filling right around the Fibonacci level. The top down trendline was successfully tested as resistance during the formation of the recent 3.02 swing high. That was essentially the third touch of the top trendline following the beginning of the line starting from the October 2023 peak. This identifies the line as solid resistance and indicates the potential for a sharp rally if it is exceeded to the upside.

Trendlines Mark Near-term Boundaries

Current price action is proceeding between two trendlines, resistance at the top and support at a new internal rising trendline connecting the August swing low with this week’s swing low. The intersection of the lines can tell us something about timing as they cross January 3, 2025. A vertical dotted line has been placed at the intersection. One of the two lines will be broken before then and that should tell us something about the strength or weakness of natural gas.

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