[ad_1]
Bottoming Process Continues
Although the price of natural gas weakened today the technical bias is to the upside. Recently, a higher swing low was established, and the 200-Day MA was successfully tested as support. Also, be aware that the 20-Day line has been turning up following a downswing. Despite the assistance of the moving averages, the most recent swing high at $3.51 and swing low at $3.10 (C) provide key price levels as they help define the current trend price structure.
Higher Swing Low Indicates Upside Potential
Since a high swing low was recently established at $3.10 there is the potential for a rising ABCD pattern to eventually be completed. An initial target from that pattern is at $4.08. However, a bullish continuation signal isn’t provided until there is a rally above the most recent swing high at $3.61 (B).
Given the possibility of the upside target and the likely completion of the bearish correction at the April swing low (A), traders are likely to look to accumulate during current weakness in anticipation of a bullish continuation. Moreover, if key long-term support is sustained around the 200-Day line, there is the potential to eventually hit a new trend high, above $4.90.
Tuesday’s Reversal May be Just the Start
Also of interest is the sharp bullish reversal that triggered on Tuesday. It showed strong once a low was established. That improvement in demand is likely to last a little longer and therefore another period of strong buying could be seen once the current minor pullback is complete. The reaction of price once a low is established should provide further clues as to the changing supply/demand dynamics.
For a look at all of today’s economic events, check out our economic calendar.
[ad_2]
