Natural Gas Price Forecast: First Pullback Sets Stage for Advance

Natural Gas Holds 20-Day Support

Natural gas triggered a one-day bullish reversal on Monday following a successful test of the 20-Day moving average. A higher daily low of $2.92 and a higher high of $3.04 were established, with prices continuing to trade near session highs at the time of writing. If momentum carries into the close and the day ends above Friday’s high of $3.00, a constructive sign of strength is indicated.

Pullback May Be Complete

The reversal follows a successful retest of support around the confluence of the 20-Day average, now at $2.93, and the 50% retracement of the recent upswing at $2.91. This move potentially completes the first pullback following the breakout above the 20-Day average on August 28. First pullbacks after breakouts often precede strong continuation rallies, similar to the sharp $0.58 (22%) advance from the August $2.62 swing low that was capped near the 50-Day moving average.

Resistance Levels to Watch

For momentum to extend, natural gas must overcome resistance beginning near the 50-Day moving average, currently at $3.07. A decisive break above that level would set up a retest of last week’s swing high at $3.20. Beyond that, an ABCD measured move projects to $3.47, aligning closely with the 200-Day moving average at $3.50, which marks the next major upside objective if the rally develops further.

Weekly Pattern Adds Strength

A bullish engulfing pattern on the weekly chart, completed three weeks ago, continues to support the medium-term outlook. The candle engulfed the prior two weeks’ ranges and closed at a three-week high, confirming a bullish reversal. Seeing strength return following a standard pullback to the 20-Day line reinforces the bullish case, showing that buyers remain in control of the trend.

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