Natural Gas Price Forecast: Rally Stalls at 2.67 Pivot

Natural gas stalled its ascent on Wednesday after hitting a new trend high of 2.67 yesterday. That high led to an intraday pullback and an inside day today. Resistance was seen following the completion of a 61.8% Fibonacci retracement, also at 2.67. The high was also around an older trendline that rises from the April 2023 swing low and connects to the December 2023 low.

Short-term Pullback May Follow 2.67 High

If resistance continues to hold natural gas may pull back a bit before preparing for a continuation higher. It broke out of a bullish double bottom pattern two weeks ago on a move above 2.30. That advance also triggered a bullish reversal on the monthly chart. Further signs of strength were indicated as the rally exceeded the July high of 2.60 on Monday and it closed above it for the day.

Recent Signs of Strength

Following the breakout natural gas consolidated for some days before pulling back to test support at the 200-Day MA with last Thursday’s low of 2.22. Notice that the purple 20-Day MA has been rising and it now marks an area near that swing low as trend support. Also, the 20-Day line has also begun to converge with the internal uptrend line. Currently, the 20-Day line is at 2.31, close to the 2.30 breakout level. In addition, the orange 50-Day MA began to turn up this week. These are signs of strength particularly given the bullish reaction once support at the 200-Day line was tested.

Potential to Test Prior Breakout Level at 2.44

Today’s high is 2.56 and a decline below it may lead to a pullback to test lower potential support levels. The 38.2% Fibonacci retracement is at 2.50. It is followed by the 50% retracement at 2.45 along with the prior trend high of 2.44. A little lower is the 61.8% Fibonacci retracement at 2.39. The degree of pullback prior to a bullish reversal may provide insight into the potential for natural gas to eventually continue its ascent. Higher targets include the measuring objective from the double bottom pattern at 2.72.

May Eventually Approach Top Trendline

Natural gas has been rising from the second bottom established at 1.875 in late-August. That bottom generated a higher swing low and a new uptrend line with a higher slope than the lower trendline on the chart. The trendline along with the top downtrend line show natural gas progressing inside a developing symmetrical triangle pattern. Therefore, there is the potential for an eventual test of resistance near the top downtrend line. The 78.6% retracement is also nearby at 2.89.

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