Natural Gas Forecast: Demand Building, Bullish Breakouts, and Price Targets

Natural Gas Forecast Video for 22.08.23 by Bruce Powers

Following a retracement to support at 2.52 last week, natural gas triggers a bullish breakout above Friday’s high of 2.64. However, resistance was quickly encountered around the 12-Day EMA at 2.66 and natural gas fell back into Friday’s range. It is set to close below that high today, at the time of this writing. Nevertheless, today’s price action shows that demand is building in natural gas and indicates that that retracement is most likely complete. We will be watching for further confirmation of strength.

Watch for Break Above 2.67 for Stronger Signal

While the 12-Day EMA is at 2.66, the four-day high is not much higher at 2.67. Therefore, a break above the 2.67 price level will provide a more reliable bullish signal. A close above 2.67 will also put natural gas back above the downtrend line as well as the 12-Day line. This type of price behavior will be needed to confirm today’s early sign of strengthening. In case the retracement is not over, watch for a drop below today’s low of around 2.56, followed by a decline below last week’s low of 2.52. The lower uptrend line will then be critical potential support.

Upward Sloping Trend Channel, Higher Target Zone

Since the second low in natural gas of 1.95 (2) in mid-April, it has progressed in an upward sloping parallel trend channel. If it continues to evolve within this price structure the potential for hitting the higher target zone from 3.20 to 3.33 remains. That price zone is anchored by the crossover of the two trendlines around 3.28. Natural gas will arrive at the time represented by the crossover by this Thursday or Friday. Subsequent advances will have to surpass potential resistance of the long-term downtrend line.

Weekly Bullish Trigger Above 2.86 Needed

Unfortunately, a weekly bullish trigger won’t occur until there is a rise above last week’s high of 2.86. In the meantime, natural gas continues to show signs of strength as it progresses high, and it also may move into a period of consolidation. We’ll be watching for signs of either going forward. Nonetheless, once natural gas closes above the downtrend line and 12-Day EMA, it should sustain that strength and the chance for further upside then increases.

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