Natural Gas Price Forecast: Daily Bullish Reversal Signals End to Pullback

Natural gas triggered a daily bullish reversal on Monday, pointing to the likely completion of a three-day correction. Following a new pullback low of 1.75 earlier in the session and test of support at the purple 8-Day MA, also at 1.75, natural gas turned higher and broke out above Friday’s high of 1.82. A daily close above that price level will confirm the reversal and set the stage for a continuation higher.

Back Above 50-Day Moving Average

The orange 50-Day MA has marked dynamic resistance for the downtrend since mid-January. It currently stands around 1.8,2 and a daily close above it will provide a clear sign that demand for natural gas is improving. At the time of the writing, natural gas is trading above the 50-Day line. Moreover, the highest daily close since the March 25 bottom (C) was 1.85. An additional sign of strength will be indicated if natural gas can close above the 1.85 price level, which will be its highest daily close so far in the developing uptrend.

Weely Chart Shows Improvement

There are also bullish signs showing up on the weekly chart. A weekly bullish reversal triggered last week during a rally above the current three-week high of 1.83. It was confirmed on a daily close above the price level, but not yet on a weekly close as last week’s closing price was above the prior week’s high. Of significance, support on the weekly timeframe was seen at the 8-Week MA after the price of natural gas had traded below that line for approximately 10 weeks. Then again today, Monday, the low of the day successfully finds support around the 8-Week line.

Upside Higher Target of 2.50

If natural gas can close above the 50-Day line and continue to strengthen, it should exceed the recent minor swing high of 1.91 and trigger a continuation of the rising trend that began from the (C) point. That will put it on track to successfully engage the swing high of 2.01 at (B). A breakout above that high will trigger a bullish trend continuation of the developing trend as well as a double bottom pattern. The first upside target is then at 2.08, which will complete a rising ABCD pattern as marked on the chart. A minimum potential target from the double bottom bullish reversal pattern is up around 2.50.

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