Looks to be Heading Towards 3.56

Nonetheless, today’s price action leaves natural gas wide open for a test of resistance around the recent swing high of 3.56, and a likely rally above it. If that high is exceeded the next likely target is the 2023 high of 3.64. That high begins the top trendlines marking the boundary of a large symmetrical triangle pattern.

It is important to note that the extended target for a rising ABCD pattern (purple) completes there as well at 3.67. Further up is the completion of an extended rising ABCD target at 3.87. A key point to consider is that a breakout above 3.64 will further confirm a bullish reversal of trend that is still making progress.

Symmetrical Triangle Breakout Proceeds

Price action following the breakout of a triangle pattern on November 20 has been a textbook example of bullish behavior so far. Once the breakout triggered the first two initial targets from prior swing highs were exceeded. Subsequently, after the high of 3.56 was reached a two-week correction began before finding support around the initial triangle breakout area of 3.02 last week.

Bullish Above 20-Day MA

Regardless of the potential for upside follow-through, a drop below today’s support at 3.18 would be short-term bearish. The 20-Day MA is a little lower at 3.14. The expectation is for natural gas to continue higher from here but that may begin to change if the 20-Day line fails to retain support. After today, the internal uptrend line on the chart will be adjusted down to connect with last week’s low.

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