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Drop Below $3.15 May Test Lower Support
Short-term resistance is at today’s high of $3.37 and support was at the low of the day, at $3.16. Despite the minor bullish indication from today’s price action, further consolidation within the day’s range is also possible. If the low of the day is broken to the downside, there is the possibility of a gap filling at $3.12. A rising trendline can also be watched for signs of support if recent lows are retested.
It is interesting to note that this week’s low, that was hit today, successfully found support around the 20-Week MA (not shown), which is $3.15. Notably, natural gas fell below the 20-Week MA last week and closed below it on a weekly basis. That was bearish price behavior. But the reclaim of the 20-Week line this week countered with bullish indications.
Weekly Bullish Sign
Therefore, support around $3.15 needs to continue to hold to confirm the bullish posture. Staying above the 20-Week line will provide another piece of bullish evidence, increasing the chance for a continuation of the bounce from last week’s low of $2.99. Regardless, natural gas is likely to complete this week as an inside week given last week’s wide trading range from $2.99 to $3.83.
Next Up is $3.51 Price Zone
A decisive breakout above Wednesday’s high of $3.37 points to higher targets for natural gas. The 50-Day MA at $3.52 is the next upside target where resistance may be seen. It is confirmed by the 38.2% Fibonacci retracement at $3.51. Since the 50-Day line had been dynamic support for the rising trend previously, until last Tuesday, there is a strong chance it will be tested as resistance at a minimum.
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