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Natural Gas Price Forecast: Potential for Monthly Bullish Reversal

By:
Bruce Powers
Published: Mar 29, 2024, 20:37 GMT+00:00

Natural gas markets pause for the holiday, but technical analysis points to potential bullish momentum with a possible upside breakout above 2.00.

In this article:

Given the holiday in natural gas markets, today is a good day to step back and look at the larger technical picture to see what it might be telling us. Considering the monthly chart. March has ended with a relatively narrow range inside month. This sets the stage for a bullish monthly reversal if the price of natural gas can trade above and then stay above the monthly high of 2.00. A daily close above high would confirm a bullish breakout and improves the chance for prices to rise from there. On a daily chart the monthly high shows up as the most recent swing high.

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Line Chart Adds to Clarity

It is easier to see the connection between the recent lows and historical lows when looking at a monthly chart. You can see where the low in March was above the 1.61 low from 2016, showing a slight improvement in price. One thing that stands out on the monthly time frame is that the monthly closing prices historically were all above the 2016 low. The same is true of the recent lows. A monthly line chart (blue) is enclosed to better illustrate the point. This is a bullish clue for what the future might hold.

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Upside From Monthly to 2.55

As noted above, a monthly bullish signal is confirmed on a daily close above the March high. An earlier bullish signal would be generated on a breakout above the most recent swing high of 2.00. The monthly chart seems to indicate a minimum potential advance to at least the 2.55 to 2.58 price zone. That is where the 8-Month moving average and the 50% retracement come together. It represents what looks to be the next clearer possible resistance zone. That assumes the 38.2 Fibonacci level at 2.33 does not reverse an advance.

What About Downside?

Alternative to the above bullish scenario, a breakdown below March’s low of 1.64 is bearish depending on the follow through. However, given the perspective offered above, natural gas is sitting on strong support that should result in eventual higher prices. In other words, the chance for an upside reversal seems more promising than a bearish expectation.

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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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