Unlocking Potential: Natural Gas Eyes Upside Breakout Beyond 2.79

Natural Gas Forecast Video for 08.08.23 by Bruce Powers

Natural gas catches a bid today as it rallies to an eight-day high of 2.75. The rally triggered a weekly bullish reversal on a move above last week’s high of 2.69. It also puts natural gas back above the 100-Day EMA, which is at 2.72, and above the internal downtrend line marking dynamic resistance of the retracement.

Overcomes 100-Day EMA at 2.72

Significantly, natural gas is on track to close above the 100-Day line today. If so, today will be only the third day in 34 weeks that it has closed above the 100-Day EMA. Natural gas has made several attempts to breakout above the 100-Day EMA over the past six weeks. Each has been unsuccessful and led to a pullback. Today is the beginning of a fourth attempt. The fourth attempt to break through a line, in this case a moving average, has a greater chance of being successful. This means that natural gas is at a critical juncture. Either the 100-Day line will mark resistance again during this fourth attempt to move higher, or a decisive upside breakout will occur.

Next, Close Above Today’s High of 2.79 Show Additional Strength

The next sign of strength will be on a daily close above today’s high, followed by an advance above the prior swing high at 2.79. If that happens then the trend high of 2.88 will be in sight with a good chance that natural gas can get above there, and eventually hit higher targets.

Higher targets include a price zone from around 3.00 to 3.03 or so. That’s where resistance was seen following a 54.9% five-day advance off the initial trend low in February. Then, further up is a price zone starting around 3.26 and rising to the 200-Day EMA, which is now at 3.41.

Long-term View: 2.79 Signals Monthly Breakout

Let’s consider the longer-term monthly chart for a moment. Last month’s high is at 2.79 and matches the next swing high to approach on the daily chart. Therefore, a daily close above 2.79 is not only a breakout above the prior swing high but also a monthly bullish breakout as well. This makes the 2.79 price level more significant than if it only had a daily level.

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