Natural Gas Price Forecast: Shows Continued Strength Following Retracement

Bruce Powers
Updated: Jun 20, 2024, 01:13 GMT+00:00

Natural gas traded within a narrow range today, reinforcing its uptrend and signaling potential for further gains if key resistance levels are breached.

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Natural gas retained signs of strength on Wednesday as it traded in a relatively narrow range near the highs of Tuesday’s trading range. Tuesday’s close was above the downtrend line, and it looks like today may also close above the line. The high for the day was 2.93 and the low was 2.86, at the time of this writing. Another close above the line would provide an additional sign of strength. Also, of interest is the 2.92 interim swing high, which was Tuesday’s high. It was busted briefly today and a close above it would further confirm strength.

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20-Day MA Retains Trend Support

This week’s bounce from the 2.76 swing low confirms the 20-Day MA as an applicable moving average to use for the current aggressive uptrend that began from the April 26 bullish reversal and breakout of a symmetrical triangle bottom. A daily bullish reversal yesterday set the stage for a continuation of the uptrend following an upside breakout of a bull pennant and break above the trendline last week.

The retracement exceeded 50% of the near-term swing and was a little shy of the 61.8% Fibonacci retracement at 2.74. It was a normal and healthy retracement following a 1.57 point or 99.2% advance in 31 days when measured from the April 25 swing low.

Bullish Weekly Candle Will Counter Last Week’s Bearish Sentiment

Last week ended with a bearish weekly shooting star candlestick pattern that triggered on Monday with a drop below 2.86. If this week’s low of 2.76 is retained as support and natural gas can end this week in the top third of the week’s range, it will have formed a weekly bullish pattern. Therefore, if it does so, heading into next week it will be positioned to trigger a weekly bullish reversal with an advance above this week’s high. This week’s bearish weekly reversal would then be negated.

Watching for Breakout Above 3.16

A rally above last week’s trend high of 3.16 will trigger a continuation of the rising trend. While natural gas may still encounter resistance up to approximately 3.20 (top of resistance zone from 3.18 to 3.20), the bullish momentum from a second and confirming breakout of the trendline should help propel it through that price range. The area around the swing high of 3.39 from early-January would then be the next higher target. That swing high is part of the downtrend price structure as it is a lower swing high.

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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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