Natural Gas Price Forecast: Breakdown Signals Point Lower

Trendline Rejection Reinforces Bearish Pressure

Downward pressure in the price of natural gas continued during Thursday’s session, despite a bounce to a three-day high of $2.99. An initial advance briefly broke above an uptrend line earlier in the session before falling back below it. A daily close below this line will confirm resistance near the line for a third consecutive day, further reinforcing the bearish implications. Early signs of bearish momentum have appeared, with the 10-day moving average crossing below the 20-day moving average, and it will soon fall below the uptrend line, adding confluence to the weakening trend structure.

Compression Pattern Break Signals Larger Move Potential

The price range for natural gas had been compressing, as defined by two trendlines that are set to intersect near April 15. One is the short-term rising lower trendline that broke Monday, and the other is the downtrend line originating from the December high.

A decline below the lower boundary line indicates a breakdown from that formation. On a weekly basis, the break will be confirmed if this week’s session closes below last week’s low of $2.90. However, additional downside confirmation is needed to fully validate the bearish outlook. That will next occur on a drop below the higher swing low in February at $2.81 and the trend low from January at $2.58.

Structural Shift: From Support to Resistance

Signs of a weakening long-term uptrend have been developing, and recent short-term price action is now aligning with that bearish shift. Most recently, in early-February, support near the long-term uptrend failed, leading to the February higher swing low. The subsequent advance retested that former support as resistance, confirming a key shift in market structure before sellers regained control. That switch from support to resistance for a key indicator is bearish. Moreover, it follows a bearish trend reversal signal on a drop below the higher swing low of $2.74 during January’s selloff.

Upside Levels That Could Shift the Bias

The bearish scenario may start to change on a sustained advance above $3.14, and then more so above the lower swing high at $3.23. That high defines the structure of the near-term downtrend, which would be reversed on a rally above it. Key resistance would then be near the 200-day moving average, now at $3.53. Until then, the prevailing downside pressure and confirmed breakdown signals continue to point toward a market transitioning from consolidation to a potentially deeper corrective phase.

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