Bullish Momentum Builds for Natural Gas: Key Levels and Trend Analysis

Natural Gas Forecast Video for 09.08.23 by Bruce Powers

Natural gas continues to advance higher today as it encounters minor resistance at the monthly/July swing high of 2.793 (C). At the time of this writing natural gas has a high of 2.794 for the day but has been unable to break through the monthly high in any meaningful way. A decisive advance above 2.793 provides a bullish monthly signal with a daily close above that level confirming the breakout.

Bull Signal on Daily Close Above 100-Day EMA

On Monday, natural gas closed (2.754) just a tad above its 100-Day EMA (2.717) thereby confirming a bullish breakout of the line. Today’s advance further confirms strength on a continuation of the rising trend. Natural gas is on track to close at its highest price above the 100-Day line since it fell below the line back in December. Three earlier attempts to break higher above the line in recent months failed and led to a retracement. This time price behavior is showing clearer bullish signs. It is also the fourth attempt to break through the line, which many times leads to success. So far, that looks to be the case.

Key Milestone: Daily Close Above Monthly High Signifies Strength

Both the breakout of the 100-Day EMA and monthly high are potentially significant as they represent relatively longer timeframes. This means that we are likely early in a shift from a downtrend to an uptrend. A second daily close today above the 100-Day line will further establish strength of the breakout. More significant though will be the daily close above the monthly high.

Measured Move Projected to Around 3.00 Based on Trend Analysis

Before reaching its first notable target zone from around 2.99 to 3.03 natural gas needs to exceed the prior trend high of 2.88 from June. Once that happens it is on track to complete a measured move around 3.00. The first measured move comes from the initial rally off the bottom of the trend in November. That advance saw natural gas rise by 53.9% at the swing high of 3.03. The new and current measured move starts from the second trend low (2) and identifies when the current advance matches the percentage move in the first rally off the bottom of the trend.

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