Natural Gas Price Forecast: Bears Maintain Control Near Support

Sitting on Critical Support

Natural gas continued to sit at the edge of support on Thursday, near the trend low of $2.78 that was established five weeks ago. It had its lowest daily closing price since the September swing low, further confirming the downward pressure, and is on track to solidify that bearish indication with a lower close today. Although surprises happen, with one more session for the week, natural gas is on track to end at its lowest weekly closing price since August, adding further confirmation for the bearish case.

Technical Factors Reinforce Bearish Momentum

Other components that support further downside include the recent test of resistance near the uptrend line, which is now reinforced by the 100-week moving average – converging with the trendline and crossing below it. The lower swing high at $3.49 continued the bearish price structure with another test of resistance at the 10-week moving average. The 10-week average is now crossing below the 100-day line, strengthening evidence of bearish momentum. All this points to a likely continuation of the decline that followed the January spike high of $7.44.

Targets if Support Breaks

A decisive break below $2.78 will trigger a bearish continuation, with the next most obvious longer-term target being the higher swing low and monthly low from August at $2.62. That area is joined by a downtrend line that marks the top of a large falling bullish wedge that triggered in October. If that level fails to hold, a further bearish reversal would put lower prices in sight, with the next obvious support zone from prior structure between $2.30 and $2.21.

Path to Bullish Reversal

To change the bearish outlook, a rally above this week’s high of $3.06 would be needed. That would secure a reclaim of the 20-day moving average, but natural gas would remain under pressure as it is still below the 100-week moving average until the $3.26 area. Overall, unless key resistance levels are decisively broken, the bearish trend from the January spike is likely to remain intact, keeping the downward trajectory in play.

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