Natural Gas Price Forecast: Bearish Outside Day Targets Channel Floor

False Breakout Sparks Sharp Reversal

Natural gas accelerated its decline on Thursday, victim of a false bull breakout early in the session. Prices surged above yesterday’s high to $3.07 early in the session, activating a hammer candlestick breakout and briefly reclaiming the 50-day moving average. Sellers quickly countered, driving steady pressure that breached yesterday’s low and hit $2.93 as of this writing. This formed a bearish outside day, with trading stuck near the lows—hinting at even weaker levels before the close.

Support Tests and Channel Targets

As noted yesterday, the $2.96 low held potential for a bounce, but the correction demanded a deeper probe of the rising trend channel’s lower end. Today’s action strengthens that view, pressuring the 78.6% Fibonacci retracement at $2.95. The chart’s lower rising channel line projects around $2.91, aligning closely for a potential floor if selling persists.

Broader Pattern and Correction Depth

Since August’s $2.62 swing low, natural gas has formed a small rising channel within a larger falling channel from March’s $4.90 peak. This setup hints at an eventual bearish continuation of the dominant downtrend. Yet, the 18% drop from the recent $3.59 high—to today’s low—suggests support could emerge before a sustainable breakdown, given the correction’s depth and prior patterns.

Momentum Risks and Rebound Hurdles

Bearish momentum remains fierce, but faltering could occur if a breakdown hits without pause or consolidation. The reclaimed falling channel dominance implies any bounce would face resistance, starting at the 20-day average ($3.15 currently). The top falling channel line would cap the initial upside target, likely prompting a reversal lower before sustained gains.

Outlook and Key Levels

Sellers’ grip tightens post-failure, with $2.91-$2.95 as the make-or-break zone. A hold here might spark exhaustion; a break accelerates the fall. Watch the close for confirmation—$3.15 looms on any relief rally, but the bearish price action calls the shots until proven otherwise.

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