Natural Gas Price Forecast: Eyes $4.17 After Breakout Above $3.84

Natural gas broke out above the May swing high of $3.84 on Tuesday, reaching a new high of $3.88 before pulling back intraday. That put it at a 48-day high and triggered a continuation of two rising ABCD patterns, as shown on the chart. A second and smaller ABCD pattern (orange) was added today, and it expands the initial target zone, which is highlighted in red. However, the breakout needs a confirmation signal with a daily close above $3.84. If that happens, upside targets are next in line. If it does not, then resistance may continue to be seen around the $3.84 price zone.

Bull Breakout Triggers

Once a daily close occurs above $3.84 the breakout will be confirmed and a target zone from $4.08 to $4.17 moves into sight. The beginning of the price range is the initial target from the larger of two rising ABCD patterns (purple), while the top of the range is an initial target from a smaller ABCD pattern (orange). In the middle of those two targets is the 61.8% Fibonacci retracement at $4.12. At a minimum, this analysis indicates that there is a good chance that at least the $4.08 level is reached.

Weekly Breakout Triggers

A weekly breakout above last week’s high of $3.77 also triggered today. So, that price level relative to the closing price today may provide another clue about demand. Nonetheless, the stage is set for a continuation higher. Natural gas has been rising off two pullbacks to support around the 200-Day MA. More recently, it reclaimed the 50-Day MA (orange) and tested support in that region during last week’s bearish correction. The faster 20-Day MA (purple) confirmed short-term strength by turning up a few days ago. It also was successfully tested as support last week.

Higher Targets Reach $4.46

Today’s rally showed the intention of natural gas to go higher. Although the first target zone has a good chance of being reached, that zone may also be exceeded to the upside. Higher potential targets start with a lower swing high at $4.25 from March and a small confluence zone from $4.35 to $4.37. The 78.6% Fibonacci retracement level is still higher at $4.46.

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