Natural Gas Eyes New Trend Highs, Technicals Are Strong

Natural Gas Forecast Video for 15.01.24 by Bruce Powers

Natural gas sees strong upward momentum on Friday as it continues to strengthen to test recent resistance approaching the 3.39 trend high from Tuesday. This is the third day in a row that trading took place within Tuesday’s price range. Resistance at the daily highs of the past two days has been exceeded and natural gas is on track to close above those highs.

Further, it is set to close at the highest daily closing price in 50 days and the highest weekly closing price in nine weeks. At the time of this writing natural gas is trading near the highs of the day, which is currently at 3.375. Today’s price action sets the stage for a potential new trend high.

Bullish Confirmation Above 3.39

If natural gas closes strong or above the 3.39 high, it is likely heading to the next higher price target zones. Highs of the past two days are around 3.23/3.22 and may mark support areas during a retracement. A close above 3.19 will be in the top third of the day’s range, reflecting greater strength than a close below that price level. Since price action from those past few days occurs within Tuesday’s trading range, there remains risk of choppy action. In other words, the market looking like it is clearly bullish and then looking obviously bearish. This means rallies are at risk of failure and so are declines at risk of rallies, at least until we break out of Tuesday’s price range.

Moving Average Crossover Signals Strength

An upside breakout and bullish trend continuation first signaled a break above the 3.39 high and then confirmed on a daily close above that price level. The potential for an eventual new trend high that exceeds the 3.64 high from October is a real possibility if we see additional bullish signs. Recent bullish price action has been further confirmed by the crossover of the 20-Day MA (red) above the 200-Day MA (blue). If you look closely, you can also see that the 200-Day line has started to head up slightly and has surpassed a prior swing high for the line.

If we do get a continuation signal the first zone is around 3.47/3.48, consisting of a prior swing high and the 88.6% Fibonacci retracement, respectively. Then there is 3.64 from the October swing high (B). And notably, a large rising ABCD pattern targets 3.92 along with the 23.6% Fibonacci retracement at 3.85.

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