Natural Gas Price Forecast: Support Tested as Bearish Pressure Builds

Weak Start to the Week Pressures Key Support

Natural gas weakened on Monday, as it fell to a low of $2.99. Both the 10-day moving average and small rising trendline were broken on the way to 20-day moving average. Support was seen near the 20-day average, but downward pressure remains. Monday’s close will likely be in the lower third of the day’s range and right near the 20-day average. Keep in mind that the front month for continuous futures will be changing.

$2.96 Support Level Under Watch

A small higher swing low at $2.96 is the next support level to observe as a drop below it will trigger a bearish reversal of the short-term rising trend. That is also a higher weekly low. Last Monday’s advance in natural gas found resistance below the long-term 200-day moving average, now at $3.55. A sharp selloff followed, which is bearish behavior in a declining trend. If $2.96 fails as support, then the chance for further downside increases, before an attempt to go higher occurs.

Bear Trend Could Extend Below $2.78

If there is a daily close below $2.96, then the most recent trend low of $2.78 is at risk of failing as well. A drop below that level will extend the bear trend that began following the January peak of $7.44. Subsequent weakness would further confirm the breakdown of the 200-day moving average and long-term uptrend line. A lower swing high and monthly low at $2.62 would present the next lower potential support area if $2.78 failed.

Bearish Context Remains Dominant

Despite the increase in bearish sentiment, at the February trend low the price of natural gas had fallen by $62.7%, surpassing the two larger bearish corrections in the advance that followed the 2024 bottom. This, along with recent price action, suggests that downward pressure may remain and could build.

What Would Signal Strength

On the upside, a decisive breakout above the lower swing high at $3.66, followed by a reclaim of the 50-day and 200-day moving averages, would be needed for convincing signs of strength. A bullish reversal of the downtrend would trigger above that swing high.

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