Natural Gas Price Forecast: Can Buyers Trigger a New Rally?

Buyers Defend Thursday’s Low

Natural gas fell below potential support near a rising trendline on Thursday, after failing to hold above the 20-day moving average during Wednesday’s session. However, once a low of $2.75 was reached, buyers stepped in and took back control, driving price higher for much of the session. Thursday’s high at the time of writing is $2.84 and trading continues near the highs of the day. The high tested resistance at the 20-day moving average and looks likely to form a potential bullish hammer candlestick pattern for the day.

Breakout Could Rekindle Momentum

Consequently, a decisive breakout above Thursday’s high would trigger a one-day reversal signal. Signs the high aligns with the 20-day moving average, it would be reclaimed on the same move, further confirming strength. If strength is subsequently confirmed with a daily close above the high, a continuation of the current advance may be ready to proceed into higher prices. A reclaim of the 50-day moving average near $2.86 would show strengthening and should be followed by a rally above Wednesday’s high of $2.91 for the next bullish signal.

Upside Targets Extend Toward $3.26

If support can hold and buyers retain control, the recent high of $3.03 becomes the first upside target, followed by the 61.8% Fibonacci retracement of the prior decline at $3.09. Ultimately, the falling 200-day moving average near $3.26 is a key upside target, along with the 78.6% Fibonacci retracement at $3.21. Since the 200-day average is falling, the longer it takes for it to be tested as resistance, if that is to occur, the lower it gets and it may soon fall below the 78.6% level.

$2.75 Becomes Key Short-Term Support

Thursday’s low of $2.75 is now key short-term support, as a sustained decline below that level would put a potential upside recovery at risk. If an upside breakout follows, it may soon be a higher swing low for the developing advance. Since the 20-day and 50-day moving averages have been converging, there is the potential for a pickup in momentum once the next direction becomes clearer.

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