[ad_1]
Sharp Rebound from Lows
Given the sharp bullish reversal seen today, higher targets seem likely before the advance is complete. This doesn’t mean natural gas goes straight up but it does indicate a possible bottom has been established at last Friday’s low of 2.99, at least for now. That low was in an area of confluence from several indicators all pointing to possible support around the 61.8% Fibonacci retracement at 3.03.
Above 3.41 Trigger Bullish Continuation
A breakout above today’s high of 3.41 triggers a continuation of the bounce. The next upside target is marked by two indicators from 3.51 to 3.52, consisting of the 38.2% Fibonacci retracement and the 50-Day MA, respectively. If upward momentum can be sustained there is a chance for a test of a higher potential resistance zone starting from the October 2023 peak at 3.64.
A potential resistance zone goes up to the 20-Day MA, currently at 3.71. Notice that a breakdown of the rising trend triggered a breakdown below the 20-Day MA and trendline on the same day, January 27. The current advance has the potential to eventually test resistance around the 20-Day line.
Bottom Likely Establish for Now
If natural gas decides to pullback and further test recent lows as support, the expectation is that it would hold as support, at least till there is a higher bounce. This is due to the combination of a clear support zone, as well as the rising trendline that is also around the lows. The expectation would be for further tests of recent lows to find support above the 2.99 price level.
Last week’s high was 3.83 and it established a high for a relatively wide range week. Since natural gas is stuck within the range, there is a chance to approach and test the area zone as resistance in reaction to last week’s very bearish price action.
For a look at all of today’s economic events, check out our economic calendar.
[ad_2]
Source link
