Natural Gas Price Forecast: Faces Resistance at 50-Day MA

Bruce Powers
Published: Apr 3, 2024, 20:15 UTC

Natural gas struggles near 50-Day MA after failed breakout earlier Wednesday, setting up a potential pullback.

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Natural gas managed to recapture the 50-Day MA, currently at 1.87, earlier in Wednesday’s session before encountering resistance following the day’s high of 1.91. It continues to trade near the lows of the day and below the 50-Day line at the time of this writing. Therefore, the close will likely be below the 50-Day line indicating that the breakout above the line has failed so far.

And it sets up a short-term shooting star bearish candlestick pattern for today. A subsequent drop below today’s low, currently at 1.84, will provide a short-term bearish signal that, at the least could see a test of support around the long-term downtrend line.

A graph with lines and numbers Description automatically generated with medium confidence

Holding Above Long-term Downtrend

There have been two prior daily closes above the long-term downtrend line since the price of natural gas rallied above it on Monday. The next sign of strength will be on a daily close above the 50-Day MA. Yesterday and today was the first test of resistance around the 50-Day line since late January. Encountering resistance around the 50-Day MA on the first approach in more than nine weeks is not too surprising as frequently a first test sees price rejected.

Areas to Watch for Support on Weakness

Yesterday’s high was right at the line and today’s likely close below the line will confirm resistance.

As long as a pullback finds support at or above the line, the breakout remains valid. In addition to possible support around the trendline, the 20-Day MA is a little below the line at 1.75. That would be the next lower possible support area. Of course, a bullish reversal above the trendline is going to be a stronger indication than a test of the 20-Day MA. This week’s low is 1.71.

Weekly Reversal Support Bullish Continuation

There was a bullish continuation of the weekly chart this week as last week’s high of 1.83 was exceeded. If natural gas ends the week above that high, it will be showing greater strength than a close below it. The first area of interest above the 50-Day MA is the prior swing high at 2.01. A breakout above that price level will trigger a double bottom breakout and signal a continuation of the developing uptrend as there will then be a higher swing high.

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About the Author

Bruce boasts over 20 years in financial markets, holding senior roles such as Head of Trading Strategy at Relentless 13 Capital and Corporate Advisor at Chronos Futures. A CMT® charter holder and MBA in Finance, he's a renowned analyst and media figure, appearing on 150+ TV business shows.

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