Unlocking Potential: Natural Gas Poised for Upside Movement

Natural Gas Forecast Video for 27.12.23 by Bruce Powers

Natural gas continued to consolidate today following a bullish advance and daily close above the 20-Day MA last Friday. Most of trading today, however, occurred below the 20-Day line and it was tested successfully as resistance with the day’s high of 2.58. The 20-Day line is currently at 2.58. Nevertheless, last week confirmed a bullish reversal on the weekly chart with a daily close above the three-week high of 2.54. Therefore, natural gas is anticipated to eventually resolve itself to the upside. It may further consolidate this week as it trades inside week until there is a decisive advance above last week’s high of 2.62.

Initial Upside Target of 2.77

An initial higher target is in the 2.77 price area. That price level is indicated by both the 38.2% Fibonacci retracement as well as the completion of a rising ABCD pattern (D) as marked on the chart. In this case, the pattern target is where the CD leg equals the progress in price seen in the first AB leg of the advance. In addition, that first target zone was initially marked with a support ridge (green arrow) following the breakdown from the rising trend channel from November 29, and then subsequently tested as resistance (red arrow).

Between Rising Trendline and 20-Day MA Resistance

In addition to the 20-Day MA acting as resistance today, support was seen at a low of 2.45, which successfully tested the internal uptrend line as support. So, we can say that the price of natural gas is stuck between support of the internal uptrend line and the 20-Day MA as resistance, with consideration given for last week’s high of 2.62. The 2.62 high is a little above the 20-Day line. A daily close above that high will be needed to confirm a continuation of the developing uptrend.

The primary main issue for natural gas is whether the recent swing low at 2.235 (A) completes the correction. There is reason to believe that it has, if for no other reason than it ended a 38.7% decline from the most recent swing high at 3.64. Therefore, higher tests of resistance on approach to the bottom of the rising trend channel should be in the works.