Natural Gas Price Forecast: Breakout Extends Bullish Reversal

Support Rebound Strengthens Trend Shift

Natural gas advanced on Thursday following an initial decline to a five-day low of $2.68 and a successful test of support near the 20-day moving average. That resulted in a strong intraday rally that triggered a one-day reversal to a high of $2.81. A daily close above Wednesday’s high of $2.79 will confirm that breakout. If support for the day is retained, this bullish price action may lead to a continuation of the bullish trend reversal that triggered on a decisive falling wedge breakout from last Thursday, extending the developing recovery structure from that base.

Moving Averages Reclaimed in Early Trend Shift

In addition to breakout signals seen above the top boundary line of the wedge, both the 10-day and 20-day moving averages were also reclaimed on the same day, further reflecting strength. The $2.68 low looks likely to be a higher swing low and part of short-term trend structure. Thursday’s session was the first pullback to test the 20-day average as support since it was reclaimed, making it an important structural retest within the new uptrend phase. Given clear signs of support, the developing advance may be ready to proceed.

Resistance Cluster Forms Near Prior Breakdown Zone

The first resistance zone after the wedge breakout was at $2.88, which is now a lower swing high. That was right at the falling 50-day moving average, now at $2.86. It completed the third test of resistance near the 50-day line since it was broken in late January. The potential demand suggested by the wedge breakout, along with the reclaim of the 20-day moving average, puts natural gas in a position to reclaim the 50-day average and further confirm strength, if follow-through buying continues above near-term resistance.

Higher Resistance Levels Define Upside Path

A decisive rally above $2.88 will signal a continuation higher, as the 50-day average will also be reclaimed by then. Key resistance looks to be from a zone around the 78.6% Fibonacci retracement of the prior decline at $3.28. Soon, the falling 100-day moving average at $3.31will cross below the Fibonacci zone and mark a lower potential resistance zone.

However, key dynamic resistance is marked by the falling 200-day moving average, now at $3.41. It was successfully tested as resistance during the prior advance in March and is expected to represent resistance again, maintaining its role as the upper boundary for the broader trend structure unless a breakout emerges.