Decoding Natural Gas Prices: Analyzing Trends, Targets, and Key Resistance Levels

Natural Gas Forecast Video for 29.12.23 by Bruce Powers

Natural gas further consolidates within a relatively tight price range and again tests resistance of the 20-Day MA. Volatility increased with the day’s range creating a green outside day. At the time of this writing natural gas is on track to close near the highs of the day and possibly above the 20-Day MA, which is currently at 2.54.

Consolidation Range: 2.385 to 2.62

The high of the consolidation range is 2.62 and the low is the most recent daily swing low and a weekly low at 2.385. On the upside, an advance above this week’s high of 2.58 will be the first sign of strength that may lead to a breakout above last week’s high of 2.62. This week natural gas has traded inside last week’s trading range. It is currently forming a bullish doji hammer candlestick pattern on the weekly chart. Whether it completes the week with a similar pattern remains to be seen.

Breakout Targets 38.2% Fibonacci at 2.77

A decisive breakout above 2.62 clears the way for natural gas to head towards its next higher target around the 38.2% Fibonacci retracement and the completion of an ABCD pattern at 2.77. A daily close above the 20-Day MA will be a sign of strength, while a close above the 2.62 weekly high confirms the continuation of the rally.

Counter-trend Rally May Test Lower Trendline Resistance

Natural gas broke down from a rising parallel trend channel in late November that had been forming for over six months. Both the top and bottom trendlines of the channel were touched more than three times thereby highlighting their significance. Therefore, it makes sense that a counter trend rally may rise to the lower trendline to test it as resistance. We’ll have to see how close to the line it may get before hitting resistance that might end the counter-trend rally.

Nevertheless, there is a key price level lower down that provides a second target around 2.88. Notice that the 50-Day MA (orange) has recently converged with the second price zone and is currently also at 2.88. It provides further evidence that natural gas may encounter resistance around the 2.88 price zone, if it gets that high.