Natural gas triggered a one-day bullish reversal from a hammer candlestick on Wednesday, reaching a high of $3.52 for the session. Resistance was seen around the 50-Day MA, now at $3.51. The bull breakout followed a retest of a support zone that includes the 200-Day MA and 61.8% Fibonacci retracement at $3.35.
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See all Natural Gas forecastsAlso, a rising trendline was reclaimed today following Tuesday’s drop below the line. At the time of this writing, trading continues near the highs of the day and a new high might be reached before the close. This puts natural gas in a position to confirm the hammer breakout with a likely daily close above yesterday’s high of $3.47. That would also confirm a reclaim of the trendline.
Higher Swing Low Established
A new higher swing low was established today, marking the likely completion of the pullback and retention of the near-term bull trend, begun from the April swing low. Support was seen in an area around the 200-Day MA and the lower trendline of a rising channel. A bounce off the bottom of the channel indicates the potential for an eventual rise to the top channel line. Whether it is eventually reached or not, the channel does increase the chance for potential targets to be reached that are below the top of the channel.
Higher Price Targets
The next bullish signal will be triggered on a rally above today’s high, while the recent interim lower swing high of $3.75 marks a more significant price level. A bullish reversal will be triggered on a rally above that high. Subsequently, the May swing high of $3.84 shows the next potential target and potential resistance area. But a decisive rally above $3.84 will put natural gas in a position to approach and possibly break out above the lower trend high of $4.15. But there is a prior weekly high at $3.95 between those two price points and it provides another potential price pivot. Higher targets are then around $4.35 to $4.37, and $4.43 to $4.46. The higher price target is a 78.6% Fibonacci retracement level.
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