Natural Gas Price Forecast: $4.59 Spike Fades – 50-Day Support Holds

Wednesday’s Counter-Trend Spike

Natural gas spiked to a new counter-trend high of $4.59 Wednesday during a shortened pre-holiday session. The initial advance broke through the 20-day average but it couldn’t be sustained as sellers took back control till the end of the session. A closing in the lower third of the day’s range confirmed seller dominance. However, the day’s low of $4.18 was a test of support at the 50-day moving average, which had previously marked resistance.

50-Day as Potential Turning Point

Once the average is recovered and then successfully tested as support, it suggests that a bullish continuation may follow. But that requires future pullbacks to also establish support near the 50-day line. In addition, Wednesday’s session ended at a price level that was tagged as both resistance and support since the past month. That provides other evidence that support around the 50-day may have meaning.

Overhead Resistance Layers

The bearish counter force is represented by the 20-day average, now at $4.87. In addition, today’s high was in a potential resistance zone in the region of the 50% retracement level at $4.65. That price zone was also an area of resistance during a tight two-week sideways range in November up to $4.69 and there is an eleven day high at $4.70 that can also be considered as part of the range ($4.65 – $4.69).

Key Levels to Watch

Moving ahead, the behavior of price relative to the two moving averages should give us the most information about shifts in price dynamics. Given yesterday’s bullish reversal off a key 61.8% Fibonacci retracement level and the failure to drop after a breakout below the 50-day average recently, it seems like the bulls might have a better chance. But price should tell us more very shortly.

Weekly Bullish Structure

This week will establish a bullish outside week, confirming strength with a weekly closing above last week’s high of $4.22. With this week’s relatively wide weekly range it would be possible for natural gas to pullback deeper yet remain within the bullish week’s range. This is something to consider given that the weekly pattern impacts the daily timeframe.

Outlook

Natural gas has shown early reversal signs with the 50-day test and bullish outside week, but the fade from $4.59 and seller dominance keeps short-term pressure alive. Hold the 50-day on pullbacks and reclaim $4.87 to favor bulls; failure there risks deeper retracement while the weekly structure provides a buffer for consolidation.

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