Natural Gas Price Tests $2.99 as Bullish Reversal Builds

Early Signs of Strength

Natural gas showed further signs of strengthening on Wednesday, reaching a higher daily low of $2.91 and a higher high of $2.99. Buyers remained in control at the time of writing, with the potential for the advance to extend further before the session ends. Both the 50-day and 100-day moving averages were reclaimed during the advance and the day’s low successfully tested those indicators as support following several days in which they had marked a resistance zone. This shows improving demand, although conviction remains relatively low as momentum remains muted.

 $2.99 Holds Key Near-Term Test

For the second time in a week, key near-term resistance at $2.99 is being tested. To break above and hold above it, natural gas will need to generate stronger momentum. If not, then further consolidation above support near $2.83 and below $2.99 may follow, giving demand more time to build. Since the full range of Wednesday’s session remains above the 50-day moving average, currently near $2.90, that average provides an initial support zone during weakness. If it holds, a bullish outlook remains intact, while a break below it would shift attention to support near $2.83 as the key zone.

Short-Term Trend Turns Higher

Since natural gas is showing early signs of a reversal from a short-term downtrend to an uptrend, any weakness may be met with support and lead to renewed demand. That scenario remains valid if support near the rising 20-day moving average, now near $2.80, is retained. The 20-day average becomes increasingly significant as natural gas moves back above last week’s minor pullback low of $2.84, it increases in significance. Holding above that level would provide another sign that the short-term trend is strengthening.

Higher Resistance Comes Into View

Despite the potential for a bullish continuation, natural gas would be advancing toward a key resistance zone represented by the 200-day moving average, now near $3.30, especially since it was confirmed as resistance during the prior advance in May. Along with the 78.6% Fibonacci retracement of the prior advance at $3.20, these levels could form a significant upper boundary for the current advance if buyers can retain control. That makes the ability to overcome $2.99 particularly important.

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