Oil & Gas - Energy - Commodities - Resources (OILBRENT)

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Natural Gas Price Forecast: Momentum Builds as First Target Exceeded
By: Bruce Powers | February 28, 2024

• Despite a bearish signal last week, natural gas surged to a three-week high, suggesting a bullish reversal and potential for further gains.

Natural gas hit resistance at the 20-Day MA on Tuesday before busting through it today. That marks another piece of evidence for the bulls, at least in the short term. Also, yesterday a bullish trend continuation signal was triggered on a rally above the prior swing high of 1.79 (B) and subsequent close above that price level. This shows improving strength and therefore increases the chance that higher price levels will be tested as resistance before this rally is complete.



Bullish Price Action Follows Tuesday’s Strong Close

In addition, the price of natural gas closed strong yesterday, in the top quarter of the day’s trading range. Today, the first target of 1.85 derived from the 100% completion of a rising ABCD pattern was reached and exceeded as buyers took control and stepped up to support rising prices. Tuesday’s advance also took the price of natural gas above the long-term downtrend line that starts from the August 2022 trend high.

Next Upside Target is 1.92

Once the first target from the ABCD pattern is exceeded, the chance the next higher target will be reached increases. That next target is at the 127.2% Fibonacci extension of the pattern at 1.92. Subsequently, if 1.92 is exceeded to the upside a relatively wide price range from 1.95 to 2.04 is then the next higher target zone to watch for resistance or a bullish breakout through the top of the range. T



Weekly Bullish Price Action

Price action seen in the weekly chart further supports further strengthening for natural gas. Last week completed a potentially bearish shooting star candlestick pattern and the week ended at a new closing trend low. Given this week’s bullish price action it looks like that was a false indication last week as today natural gas advanced to a three-week high. So, there is a clear bullish weekly reversal and a failure of the bearish signal from last week. False moves are frequently followed by a slingshot of sorts in the other direction. If correct, natural gas has a chance of eventually exceeding 2.04. We will be watching its behavior around and within the 1.95 to 2.04 price range carefully for clues.

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