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Bullish Resurgence: Natural Gas Rebounds After Bearish Start

By:
Bruce Powers
Published: Sep 26, 2023, 20:37 GMT+00:00

A bullish hammer pattern and dynamic uptrend support signal potential for a rally towards recent highs.

Natural Gas storage facility, FX Empire

In this article:

Natural Gas Forecast Video for 27.09.23 by Bruce Powers

Natural gas began the day triggering a bearish reversal on its weekly chart as it fell below last week’s low of 2.595. However, it eventually found support at a low of 2.55, which was around the long-term uptrend line. The bullish reaction from that low is what makes natural gas interesting. It began the session in a clearly bearish posture, but since then reversed higher and rallied to move to a bullish posture. Failed moves can lead to some of the faster price moves in markets.

A graph of stock market Description automatically generated with medium confidence

Bullish Reversal Points to Higher Prices

Following an intraday bullish reversal off the 2.55 level, natural gas rose back above last week’s low and is now approaching Friday’s high of 2.67. An advance above that high will trigger an inside day bullish breakout. A test of the three-day high at 2.68 will follow. Nevertheless, given today’s bullish reversal, the 2.68 high should easily be busted to the upside.

Today to Close with Bullish Candlestick Pattern

Further supportive of a bullish continuation is today’s candlestick pattern. Natural gas is set to complete a bullish hammer pattern today with a daily close near the high of the day’s range. It is particularly notable given that it likely completes the current correction in natural gas and likely marks the beginning of a rally that could take it to recent highs.

Trendline Turns Price Higher Once Again

Today’s low is the sixth touch of the uptrend line. In general, the more touches the more significant or stronger the line. Since price was clearly rejected to the upside from the price area around the line today, it remains dynamic support for the rising trend. The behavior of price following a new touch of the line suggests a switch from the bears dominating trading activity to bulls dominating. We’ll know soon enough given the follow-through to today’s bullish indications.

The initial target for natural gas is the internal downtrend line that defines the top of a symmetrical triangle type pattern. It has been developing with the two boundary lines of the pattern heading towards each other and eventually crossing. Once the trendline is broken to the upside, natural gas will encounter potential resistance around the two swing highs at 2.87. A break above there suggests a rally to at least the swing high of 3.02.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

Bruce boasts over 20 years in financial markets, holding senior roles such as Head of Trading Strategy at Relentless 13 Capital and Corporate Advisor at Chronos Futures. A CMT® charter holder and MBA in Finance, he's a renowned analyst and media figure, appearing on 150+ TV business shows.

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