Natural Gas Price Forecast: Bulls Extend Rally Above Key Support

Bullish Breakout Signals Strengthening Momentum

Natural gas futures spiked to a high of $4.40 on Friday and triggered a bullish continuation of a rally. The advance showed momentum building, as the day is set to end with a relatively wide range and a higher daily low at $3.82. Buyers remain in charge with a closing price for the day likely in the top quarter of the day’s price range.

Short-Term Support Levels Come into Focus

Friday’s low is short-term support, with the advance expected to continue if that level is retained. Pullbacks into the day’s $3.82 to $4.40 range will likely be met by buyers above the day’s high. Potential minor support of $4.05 is represented by the 20-day average, which was confirmed as resistance during a bullish retracement in late-December. Note that recent volatility is a concern for the validity of the moving averages. Nonetheless, as with all potential pivot levels, the reaction of the price at the level needs to be watched for confirmation of either bullish or bearish signs, depending on direction.

Key Resistance Zones and Fibonacci Targets

The 50-day average at $4.27 was reclaimed today, but there is little evidence that shows natural gas respecting the average in recent months. But if it shows as support during a minor pullback from Friday’s high, then that will show a recognition, but only for the short-term. There is the confluence of the 61.8% Fibonacci retracement of the prior decline at $4.55 and it is joined by a lower swing high at $4.59.

Downside Risk Defined by 200-Day Support

On the downside, if today’s low is broken, then another test of support near the 200-day average and this week’s low, at $3.59 and $3.58, respectively, looks possible. Given the bullish reaction from that low suggests strong buyer interest at or above that price zone. At this point, a pullback into Friday’s range should set up short-term bullish setups in anticipation of a continuation of the bounce. Strong support at the 200-day average suggests that the pullback to the 200-day line has completed. The 200-day average shows validating by being tested several times as support and resistance since the 2024 bottom.

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