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Natural Gas Price Forecast: Resistance Seen After Target Hit

By:
Bruce Powers
Published: Feb 29, 2024, 21:17 GMT+00:00

Monthly and weekly charts suggest a bullish outlook, with potential for a breakout above recent highs, leading to a gap fill opportunity.

In this article:

Natural gas continued its advance on Thursday, triggering a new daily high and daily low. The day’s high of 1.92 completed a 127.2% extension of a rising ABCD pattern (D), thereby reaching the second initial target. Yesterday’s closing price was 1.87. If natural gas can close above that price level today, Thursday, it will represent a stronger close than if it ends below that price level.

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Signs of Improving Demand

For Thursday, there were several indications showing short-term demand improving. The 20-Day MA was exceeded to the upside and the session closed above it. Currently, the 20-Day line is at 1.81. Second, the day ended above the downtrend line. And third, natural gas busted right through the first target zone at 1.85 with little hesitation and closed above that price level. The 1.85 target is the 100% completion of a rising ABCD pattern.

Potentially Bullish Monthly Pattern Forms

On a monthly basis, natural gas will complete the month of February with a potentially bullish hammer candlestick pattern bottom. A bullish breakout would then occur on a rally above this month’s high of 2.17. That high happens to be the high following the gap down on January 29. In other words, a monthly breakout will put the price of natural gas heading into that gap. Therefore, there would be a good chance the gap would fill, at a minimum, given the significance of a monthly breakout.

Weekly Behavior is Bullish

The weekly chart is also bullish. A bearish shooting star candle completed last week at the lowest weekly closing price in about 189 weeks. It was June 2020 when the weekly close was lower. However, the potentially bearish shooting star pattern failed to follow through. Instead, natural gas rallied above last week’s high, triggering a bullish reversal. The fact that it followed a bearish pattern increases the chance for a continuation higher as some of the fastest bullish moves come after failed bearish signals.

If natural gas continues to rally above today’s high of 1.92 it will next face two potential resistance areas initially. The first is from around 1.95 to 1.97. A second high price area is then at 2.02 to 2.04.

For a look at all of today’s economic events, check out our economic calendar.

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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