Weekly and Daily Breakouts Signal Positive Trend for Natural Gas

Natural Gas Forecast Video for 29.08.23 by Bruce Powers

Natural gas breaks out of Fridays inside day high of 2.56 today on a gap up, then keeps going. Today’s advance to a high of 2.695 showed real strength as silver also triggered a bullish breakout of the 34-Day EMA (orange), the internal downtrend line showing dynamic resistance of the retracement, as well as the nine-day high of 2.67. That high was noted last week as the top of a nearby resistance range. Once cleared, natural gas should have completed its recent bottom and be ready to move forward with an upward bias.

Weekly Chart Confirms Bullish Strength

Today’s advance also triggered a bullish breakout on the weekly chart (not shown) on a move above last week’s high of 2.66. Bullish behavior on a weekly chart technically confirms strength that can be seen on the daily chart. The fact that the weekly breakout just began strengthens the bullish argument for an eventual trend continuation higher – above 3.02. A prior swing and weekly high around 2.79 marks an initial target, followed by the swing and weekly high of 2.86. Now that last week’s high was busted to the upside, the three-week high of 2.86 presents a target.

Weak Close May Indicate Short-term Stall of Advance

Despite the signs of strength today indicated by breaks above resistance, at the time of this writing natural gas is at risk of closing below key resistance levels broken earlier in the session. That would not be the type of confirmation looked for by the bulls. Ideally, a bullish breakout closes strong, in the top quarter of the days range, and worse case in the top half of the days range. Half of today’s range would be at 2.52 and a quarter of the range is at 2.66.

A weak closing for natural gas could easily lead to further consolidation before it is ready to proceed higher if it is to do so. Such price behavior certainly doesn’t point to an immediate upside continuation for tomorrow, Tuesday. Nevertheless, the direction indicated by today’s bullish action is higher. We will continue to watch for additional signs of strength and new bullish setups to prepare for the upside continuation when it comes.

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