Unlocking Potential: Key Indicators Suggest Continued Upside for Natural Gas

Natural Gas Forecast Video for 22.12.23 by Bruce Powers

Natural gas made a little upside progress today as rose above the internal downtrend line to a new trend high. Previously the line acted as resistance, and it has now been exceeded. Subsequently, a test of resistance at the 20-Day MA occurred at the day’s high of 2.60. Today will complete a wide range green outside day as a drop below support triggered earlier in the session when the bears were in charge. However, before the end of the session buyers took control, driving prices to a new trend high.

Next Sign of Strength Given on Rise Above 20-Day MA at 2.60

The 20-Day line is at 2.60 and a decisive daily close above that line will confirm a continuation of the bullish reversal from the recent swing low of 2.235. We can establish higher price zone targets by looking at where there is confluence from different indicators. Those are the price zones that may show greater significance when approached. Previous support and resistance levels may present resistance on the way up, and Fibonacci retracement levels.

Target Zones: Confluence of Indicators Identifies Significant Price Levels

Given today’s bullish price action, a rising ABCD pattern has been added to the chart utilizing the Fibonacci extension tool. You can see that price levels derived from the tool converge with previously marked potential resistance levels. Specifically, the 38.2% Fibonacci retracement at 2.77 is confirmed by the ABCD pattern as the 100% projection of the AB leg starting from point C completes at the same price. Next, the 127.2% Fibonacci extension of the CD leg of the trend ends at 2.89, almost an exact match with the 2.88 price area identified from prior price structure of support and resistance levels.

Indicator Alignment: Multiple Signals Strengthen the case for 2.88 Resistance

The bottom line is that these two price levels can be considered to have a greater chance of being reached since two or more indicators identify similar levels. Moreover, keep an eye on the progression of the 50-Day MA as it is falling towards the 2.88 price zone. It is possible that by the time the price of natural gas rises to test resistance of the 2.88 zone, the 50-Day line may be further confirming the significance of that area. By significance, I mean the potential to see strong resistance, or a clear bullish breakout continuation.

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