Natural Gas Price Forecast: Reversal Signal Eyes Higher Targets

Support Holds as Buyers Regain Control

Natural gas triggered a one-day bullish reversal on Wednesday, of a hammer candlestick pattern, and advanced to a two-day high of $3.25. A higher daily low was established at $3.14, successfully testing support near the 100-day moving average. That average was reclaimed last Thursday, and it served as support on both Tuesday and Wednesday.

Although there was a brief undercut of the 100-day line on Tuesday, the session closed above it. Then, during Wednesday’s session, buyers provided clearer confirmation that the moving average was holding as support. A close above Tuesday’s high of $3.23 will confirm the one-day bullish reversal signal.

Tuesday’s low of $3.10 is now a higher swing low and the 10-day moving average is confirmed as short-term trend support. Now that the 100-day moving average has been confirmed as support, additional confirmation is needed. This would start with a decisive advance above Wednesday’s high, establishing another higher daily high and low. The successful test of support during Wednesday’s session shows buyers regaining control, but follow-through is needed to reinforce that signal. If it does not occur, the advance faces a greater risk of stalling or failing to generate sustained upside momentum.

Resistance Levels Come into Focus

If natural gas remains above the 100-day moving average, now near $3.15, it has a chance to strengthen and challenge resistance around the 200-day moving average at $3.41, or higher. If demand continues to build, a top target zone for the current advance is near the lower swing high of $3.49 from March. That high is also the beginning of the falling wedge pattern that ultimately led to a bullish reversal and the start of the current short-term uptrend.

Long-Term Trendline Marks Potential Objective

It is not only the lower swing high that suggests the potential for higher targets; the long-term uptrend line is also approaching as a possible resistance level. Until it broke in mid-February, that trendline had represented dynamic trend support. A continued advance from the recently confirmed support near the 100-day moving average would complete the process of testing that former support trendline as resistance. However, this does not mean it will be reached, only that it represents a reasonable upside objective if bullish momentum continues to strengthen.