Bullish Momentum: Natural Gas Surges Beyond 200-Day Moving Average

Natural Gas Forecast Video for 04.01.24 by Bruce Powers

Natural gas clears its 200-Day MA on Wednesday with a breakout above the prior trend high of 2.62. It remains on track to close well above the 200-Day line today, which is also currently at 2.62. The low of the day tested support of the 20-Day MA for the second day in a row and has since risen further above that line today. Yesterday’s high was 2.675. So, a daily close above that level would be a slightly stronger indication of strength than a close below that high. Nevertheless, natural gas is set to close above the 2.62 swing high thereby confirming the developing advance.

Next Higher Target Zone: 2.77 to 2.80

The next higher target is a range from 2.77 to 2.80, consisting of the 38.2% Fibonacci retracement and completion of a rising ABCD pattern, respectively. Given today’s bullish price action, the chance of reaching this first target zone has improved. The 2.80 target from the ABCD pattern is the first target from the pattern. It completes where the price gained in the CD leg of the advance matches the price move in the first AB leg.

Secondary Higher Targets

Secondary targets can be derived from the pattern by extending the CD leg relative to the AB leg by the 127.2% and 161.8% Fibonacci ratios. In this case, targets from the extended ABCD pattern are determined at 2.90 and 3.035, respectively. Note that the 2.90 price level is within a larger potential resistance zone bounded by a prior pivot level of 2.88 and the 50% retracement at 2.94. Further, the 50-Day MA is at 2.85.

Short-term Bullish. Intermediate-term Uncertain

The overall technical situation with natural gas shows conflict between bullish and bearish indications. For example, a rise above the 200-Day MA is bullish, while a breakdown of a rising bull flag on November 27 and subsequent decline is bearish. If natural gas can reclaim its 50-Day line by closing above it on a daily basis, the outlook for natural gas prices improves. Until then, the expectation is for natural gas to continue the current counter-trend rally until hitting resistance that is strong enough to turn price back down, leading to a test of support levels.