Breaking Out: Natural Gas Rally Hits 47-Day High Amidst Bullish Trend

Natural Gas Forecast Video for 19.05.23 by Bruce Powers

It has taken a little time, but natural gas is finally showing some strength. Today, it triggered a bullish trend continuation on a rally above the prior swing high of 2.53 (B) and will close above it. It was up 10.8% at the time of this writing and is on track to end the day with the highest daily closing price in 47 days. Today is the third strongest daily performance this year. Bullish momentum was confirmed by the breakout of an ascending triangle on the 14-Day relative strength index (RSI) momentum oscillator.

Natural Gas Complete First Target for ABCD Pattern

The first target zone for natural gas has been reached and the completion of a rising ABCD pattern was done at 2.61. Today’s rally also completed a 61.8 Fibonacci retracement at 2.62. The identified resistance zone on the chart goes up to a swing high at 2.67. A daily close above that high will provide new confirmation of strength.

Bottom Expanding Triangle

Nevertheless, natural gas is not necessarily going to maintain a sharp rally. It is close to the top trendline of a bottom expanding triangle consolidation pattern. The boundary trendlines are heading away from each other. Whether this pattern continues to have an influence remains to be seen. If it does, resistance could be seen near the trendline at the top of the pattern. Currently, that line is around the top of the resistance range at 2.67. But the value represented by the line will change moving forward given the angle of slope.

Strong Bullish Close

Today’s bullish price action and strong daily close near the top 25% of the day’s range bodes well for the bull trend. Upside continuation may come tomorrow or in the coming days if the trend continues in the near term. Once a daily close above 2.67 further confirms strength, natural gas is next on target for a resistance zone around 2.77, followed by the 3.00 price zone. That higher zone includes the completion of a large, measured move (2) that will match the price change in the first measured move (1) at 3.00.

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