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

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Natural Gas Symmetry Pattern Points to Higher Targets
By: Bruce Powers | March 27, 2024

• Natural gas is testing support at the 8-Day MA and 1.70 level, with a bullish reversal indicated on the weekly chart.

Natural gas pulls back below Tuesday’s low to test support at the 8-Day MA. Support and the low of the day for Wednesday was at 1.70, at the time of this writing, and the 8-Day line is at 1.70. As of Monday’s 1.59, swing low (C), natural gas began the second leg up of a rising ABCD pattern. It remains valid unless there is a drop below 1.59.



Higher Swing Low Points to Improving Demand

Since there is now a higher swing low at 1.59, natural gas is showing improving underlying demand. It is still early but that is the situation currently. Therefore, the expectation is for the initial target from the ABCD pattern to be reached. It completes at 2.08, which is where there is price symmetry between the CD leg and the AB leg of the pattern. That target is then watched as any pivot level may be. Either resistance is seen or a breakout through the target zone follows and natural gas heads towards higher price levels.

Resistance Seen at Long-term Downtrend Line

Nevertheless, the next potential barrier that needs to be busted for further signs of strength is yesterday’s high of 1.83. Notice that resistance was seen right at the long-term downtrend line. That line was successfully tested as resistance twice previously (red circles). Therefore, it represents the next important barrier to be broken if the bulls are going to take back control. If it is exceeded to the upside, the next target zone would be around the 50-Day MA.

50-Day Line at 1.94 Also Upside Target

The 50-Day line is currently at 1.94 and is confirmed by the important prior trend low from April 2023. It was critical support at the same price in 2023 and now it is potentially significant resistance. That also means that a bust-up through that price level should see demand increase as it will mark a key improvement in the developing uptrend. Although, keep in mind that it is a counter-trend rally within a larger downtrend price structure.

Weekly Bullish Reversal Signaled

Currently, natural gas is showing a bullish reversal on the weekly chart, which is an outside week. A weekly close above last week’s high of 1.77 will provide a stronger sign of strength than a close below that level.

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