Natural Gas Price Forecast: Recovery Signals After Bullish Breakout

Breakout Confirmation After Retest

Natural gas triggered an upside continuation of a falling wedge breakout on Thursday, which was first initiated on Tuesday. Following a two-day pullback to test support near previous dynamic resistance represented by a downtrend line, a new bullish reversal signal was generated on a rise above a lower swing high at $2.76. That advance further confirmed the falling wedge breakout and therefore increases the chance that higher initial targets may be hit before natural gas reverses back toward prior trend lows.

Key Moving Averages and Momentum Shift

The 20-day moving average at $2.68 has been closely aligned with the trendline, increasing its significance as a recognized price zone. Notice the strong bullish outside day that formed on Thursday and fully engulfed the ranges of the previous two days. While a close above the three-day high of $2.74 will show strength and confirm the wedge breakout, a stronger and more meaningful close is achieved above $2.76, as that would further confirm a bullish reversal signal within the broader trend structure.

Higher Swing Low Supports Continuation Setup

Thursday’s low will generate a higher swing low at $2.59, which should end the first pullback following the upside breakout of the wedge. Since the breakout of a lower high was triggered (above $2.76) along with a higher swing low being established, there should be at least another leg up in the bounce, at a minimum. That makes the falling 50-day moving average at $2.88 a prime candidate for the next upside target zone. Although it was successfully tested as resistance during the prior upswing and it may do so again, the wedge breakout suggests higher prices.

Longer-Term Targets and Dynamic Resistance

A minimum target for the pattern is to its beginning, which is at $3.49. This doesn’t mean that the potential target will be reached, but it does suggest that bullish momentum may now improve. Both the 100-day moving average at $3.40 and the 200-day moving average near $3.43 further validate the wedge target. Keep in mind, though, that since they are falling and represent key long-term dynamic resistance, the upper target range will continue to adjust lower over time as price interacts with these declining averages.

Early Recovery Phase with Conditional Upside

Taken together, the above analysis suggests natural gas may be transitioning from a corrective phase into an early-stage recovery. However, given long-term resistance levels noted above, the initial upside path remains defined and conditional on continued support holding above key breakout levels.

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