Natural Gas Surges to New Highs: Bullish Momentum Continues

Natural Gas Forecast Video for 10.08.23 by Bruce Powers

Natural gas has its day as it surges to a new trend high of 3.018. That price completes the first target zone for natural gas, that goes up to a high of around 3.03. At the high natural gas was up 55.1% off the trend low of 1.95 (2). On a percentage basis the current advance slightly exceeds the first rally off the bottom (1), which was 53.9%.

No Sign Yet of Stopping

Nevertheless, there is no sign yet that natural gas has completed its rally. At the time of this writing, it is set to close strong in the upper 25% of the day’s range. The 25% level is at 2.956 currently. A strong close indicates that natural gas may not be done with this rally. Regardless, today’s price action shows strength that is not likely complete.

Need Daily Close Above 3.027 to Confirm Strength

A daily close above the March swing high of 3.027 is needed next to confirm strength. At that point, the bottoming pattern should be complete. This doesn’t mean there isn’t backing and filling within previous ranges, but rather retracements should eventually be followed by a continuation of the developing bull trend.

Monthly Breakout May Boost Demand and Extend Rally

A clear change in the monthly chart today is potentially significant (needs follow-through). Today’s rally confirms a breakout of an inside month on a move above July’s high of 3.018. Since today will likely close above that high, the breakout is confirmed. Although upside follow-through may not be seen immediately, the monthly trigger may assist in increasing demand, which could help keep the current rally going for a little while longer.

Higher Target Zones if Rally Keeps Going

The next identified target zone starts around 3.20 and goes up to 3.31 approximately. Several Fibonacci targets identify the zone along with an uptrend line and downtrend line. Further, the 200-Day EMA is a little higher at 3.40. Once the 100-Day EMA is broken to the upside (confirmed yesterday), the possibility of reaching the 200-Day line increases. During retracements the 100-Day EMA is a key support area to watch price action for confirmation. It is currently at 2.72.

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