Natural Gas futures moved higher in Wednesday's session to close above $4.00 per million BTU, in what may be a set-up for a breakout trade. The push higher carried the price above resistance created by a Falling Wedge chart pattern, illustrated here on the longer term 240-minute time frame.
This pattern shows a very clear congestion zone with consecutively lower swing highs as the market settled below the $4.00 level. This price action formed the top of the wedge, which is well developed and scores a 7-bar rating on overall quality. Tuesday's move above the recent tops executed the breakout on strong momentum, followed by a successful retest of the trend line and a rally upwards towards the forecast target.
The projected move higher from here calls for a minimum price of $4.085 with the upper end of the range marked at $4.213 to exceed the previous meaningful rally which occurred at the end of August. The successful completion of this breakout pattern would place the market on solid footing to begin a seasonal trend higher into the winter demand season.
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