Natural Gas Price Forecast: Bullish Reversal Extends Higher

Short-Term Bull Trend Strengthens

Natural gas extended its developing short-term bull trend on Monday, reaching a high of the day at $2.93. That triggered a continuation of the advance that began following the trend low of $2.50 in April. Prior to a sharp improvement in bullish momentum, support near the 10-day moving average was successfully tested as support, with the day’s higher daily low of $2.75. This may have significance, since confirmation of support at the 10-day moving average indicates that short-term bullish momentum is improving.

Structure Shift After Swing Low Formation

The advance established a slightly higher swing low near $2.95 from last week, which is now key short-term support. Trading remains near the highs of the day at the time of writing, with natural gas looking likely to end the session in a similar bullish position, confirming the new trend high breakout. There was also the reclaim of the 50-day moving average that occurred during Monday’s advance, and it is set to be confirmed with a decisive close above it. If natural gas continues to trade above the 50-day moving average, it will have a near-term upward bias.

Falling Wedge Breakout Continues to Influence Price Action

Since the bullish reversal that began on a breakout of a falling wedge recently continues to develop, a deeper pullback could still occur without diminishing the bullish implications of the pattern breakout and subsequent reclaim of major moving averages. The 10-day and 20-day moving averages were reclaimed during the breakout, reinforcing the shift in short-term trend structure.

Higher Timeframe Resistance Comes into Focus

If buyers can remain in control, and it looks like they might, then the key upside target is defined by the falling 200-day moving average, now at $3.41. There is also the lower 100-day moving average, now at $3.28, that could provide the upside target. But given longer-term bearish reversal pressure that began in February, a move closer to the long-term uptrend line to test it as resistance is possible. Keep in mind that since the 200-day moving average is falling, it will eventually intersect with the uptrend line, marking a lower potential dynamic resistance zone.

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