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Natural Gas Price Forecast: Will Support at 1.52 Lead to a Reversal?
By: Bruce Powers | February 20, 2024

• Despite the current downtrend, natural gas could see a turnaround as support at 1.52 holds, prompting a potential rally towards key resistance levels. But a bullish signal is needed first, otherwise the downtrend could continue.

Natural gas has reached a price area where it might see support that could stop and reverse the decline. However, it is too early to say how the current situation will play out. Since February 5, natural gas has fallen with a consecutive series of lower daily lows and lower daily highs. There was only one day different and that was an inside day from last Friday.



Natural Gas Stalls Descent at April 2020 Low

The corrective low to date is 1.52. That matches solid support seen at 1.52 in March and April 2020. Although those lows were exceeded to the downside briefly in June 2020, the 1.52 level was shown as support over two months in 2020. Given that the current decline has stalled at 1.52, it remains a potential reversal point. A rally above today’s high of 1.62 would provide the first sign of strength that could lead to higher prices. Given that a rally above a prior day high is a clear change in the recent downtrend pattern, upside follow through may be seen.

Key Price Levels if Rally Triggers

Price levels to watch during a rally start with the 1.60/1.61 price zone from the March 2016 swing low followed by the 8-Day MA (light blue) at 1.70. It is quickly followed by a price level that was key support in September 2020 at 1.80. Further up are the prior trend lows from 1.95 to 1.97. The 20-Day MA (purple) is at 2.03 and marks a key near-term trend indicator. This is particularly true since the 20-Day line converged with the short downtrend line starting from around the gap down on January 29.

Lower Price Levels

On the downside, the downtrend is still intact and pointing to lower prices. Unless there is a bullish reversal signal first, natural gas may continue its correction and fall below 1.52. In that case, the next area to look for support is around 1.49. Reaching that price will complete a 127.2% Fibonacci extension (greater than 100% retracement) of the most recent rally that began from the December 13 swing low. Further down is possible support around 1.44, which is a 28-Year low reached in 2020.

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