Natural Gas futures executed a breakout from a long-developing Falling Wedge chart pattern, illustrated here on the Autochartist 240-minute time interval. The breakout confirmed during Tuesday's trading session, with buying action pushing the market firmly above major resistance just above the $3.90 price level.
Momentum appears very strong, measuring a full 10 bars, and this pattern has been the dominant technical pattern since Natural Gas began its major price descent from the $4.50 swing high that came with the major cold snap across the United States. The futures have minor resistance which must be overcome near $4.00 to reassure a completion of the Falling Wedge, but this appears likely given the current strength of the market.
The breakout from the formation creates the forecast for a rally to a higher trading range in the near term. The minimum price projection calls for a retest of $4.16 on the nearby futures, with a higher target near the top of the wedge of approximately $4.46 per million BTU's. A close back below $3.85 would negate the bullish pattern for the time being.
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