Natural Gas Price Forecast: Rally Fails at $4.22 – Bear Engulfing Targets $3.84

Thursday’s Bearish Engulfing Pattern

A short-term rally attempt by natural gas following this week’s low of $3.84 is showing signs of failure. Thursday’s price action has resulted in a bearish engulfing pattern set to confirm with a daily close below Wednesday’s low of $3.88. The day’s high of $4.22 was a successful test of resistance at prior support from the November higher swing low at $4.24. This is typical behavior for a bear trend where prior key support levels are tested as resistance during bounces.

Although early session strength reclaimed the 50-day average, the subsequent reaction near prior support, along with a weak close, is clearly bearish. Sellers remain in control at writing and the low for the day may be lower by the end of today’s session.

Resistance Confirmation

Today’s bearish behavior adds to the likelihood that the next lower key support zone may be reached before the current retracement completes. The 61.8% Fibonacci retracement at $3.89 defined this week’s support zone. The reaction of price resistance represented by the 50-day line and a top channel line has shown the sellers remaining in charge. The two indicators show a similar price area for resistance and today’s bearish reaction confirms it. Once prior key support is shown as resistance, the downtrend may be ready to proceed. However, a drop below and daily close below this week’s low of $3.84 is still needed for a bearish continuation signal.

Deeper Support Targets

If natural gas fails to take out today’s high before a new trend low, then the next lower target looks likely to be reached. The 200-day average at $3.58 anchors the next lower price zone, along with a long-term uptrend line and a horizontal level around $3.59. That price area was shown as both clear support and resistance in the past. Most recently with the October high at $3.59.

More significantly, the 2023 peak was at $3.64. If that zone fails to reverse price, then the 78.6% Fibonacci retracement at $3.45 becomes a target. There is also confirmation for the 200-day price zone in the weekly chart as the 50-week and 20-week averages are at $3.63 and $3.61, respectively.

Upside Reversal Requirements

On the upside, a decisive breakout above today’s high would be needed for a bullish reversal. That would put natural gas in a position to challenge resistance near the 20-day average, now at $4.55 and falling.

Outlook

Natural gas’s bounce has stalled exactly at flipped support with a bearish engulfing pattern, reinforcing seller dominance and raising odds of a confirmed break below $3.84. Hold above today’s high to keep countertrend hopes alive; failure opens acceleration toward the powerful 200-day confluence at $3.58–$3.64 and potentially $3.45 if that breaks.

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