Second Rise Above 200-Day Moving Average

Last week natural gas exceeded the 200-Day MA and closed above it for the first time in 10 weeks. That set the stage for further strengthening. Another breakout above the 200-Day, now at 2.25, that is retained, prepares natural gas for a breakout from a bullish double bottom pattern. Notice that today’s advance exceeded the 200-Day line but at the time of this writing, natural gas is trading below the line and not on track to close above it.

Waiting Breakout of Double Bottom

A bull breakout of a double bottom pattern will trigger on a decisive rally above 2.30. That will also confirm a bull continuation of the developing uptrend as a violation of the 2.30 swing high presents a higher swing high and that goes with an uptrend. Also, the purple 20-Day MA is close to crossing above the orange 50-Day MA. A bullish crossover of the 20-Day line above the 50-Day line will confirm underlying strength in the price of natural gas and supports the likelihood of a rise to higher targets in the near term.

Pattern Points to 2.72

Following a double bottom breakout natural gas heads towards the target from measuring the pattern at 2.72. And eventually it may be heading towards a potential test of resistance around the downtrend line. The line is close to the 78.6% retracement level at 2.89. It marks the second higher potential target price zone following a breakout of the double bottom pattern. The first resistance zone following an upside breakout is likely from 2.47 to 2.52, consisting of a prior interim swing low and the 50% retracement, respectively.

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