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Bullish if Remains Above $3.91 Support
If support remains above $3.91, natural gas may rise. Although a breakout above today’s high will show strength, an advance above Tuesday’s high at $4.19 would be a clearer bullish sign. Nonetheless, natural gas would be rising into a potential resistance zone that stopped the last two advances at $4.37 and $4.48, respectively. The rising internal trendline marks dynamic support for the uptrend and a bearish signal would be indicated on a decisive drop below that line.
Further Weakness Possible
Moreover, it would increase the risk that this week’s low of $3.91 fails as support and the price of natural gas goes down further. Since resistance was seen at the top of a large rising trend channel in the current advance and for the prior swing high, there is the possibility that the next lower trendline is eventually tested as support.
Either way, that possibility could lead to a notable bearish correction towards lower potential support levels. It is notable that since the 50-Day MA was reclaimed two weeks ago and there has not yet been a pullback to test the 50-Day line as support. That makes the 50-Day MA around $4.69 a potential target. But there are other price levels near the 50-Day line, which can be considered as well.
50-Day Moving Average Support Could be Tested
Although the 50% retracement at $3.73 is the next lower target if natural gas falls below $3.91, lower price levels converge between the 50% retracement and the 61.8% Fibonacci retracement level at $3.56. The 50-Day MA is included within that price area, as well as the 20-Day MA at $3.33, plus a weekly low at $3.55.
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