[ad_1]
Bullish Outside Day and Hammer
Furthermore, an outside day will be established today along with a likely bullish hammer candlestick pattern. Wednesday’s high was $3.93 and if natural gas closes above it today, the inside day breakout will be confirmed. Also, notice the relationship to the declining parallel trend channel. There was a breakout above the top of the channel and the day’s closing price may also be above the line.
The prior interim swing low at $3.96 can be used as a proxy for the line. Earlier in the day natural gas reclaimed the 50-Day MA on a move above $3.88. Therefore, the recovery since dropping below the line on Tuesday was relatively quick and therefore a bullish indication.
Upside Initial Target is 20-Day Moving Average
An initial upside target for natural gas should be around the 20-Day MA, now at $4.11. Since there is also the 38.2% Fibonacci retracement at $4.18, they can be watched together for signs of resistance. A little higher is a prior interim swing low at $4.26, also a weekly high. Since it is part of the recent decline, it represents a key potential resistance level, as a rally above $4.26 will signal a bullish reversal of the bearish correction.
Week May End in a Strong Position
Since there is only one more trading day to the week, today’s advance may establish a bullish weekly candlestick pattern. That would set up a potential bullish reversal on the weekly chart going into next week. If that happens then the higher targets should be more likely to be reached. Of course, there is always the possibility that trading next week is contained within this week’s price range.
For a look at all of today’s economic events, check out our economic calendar.
[ad_2]
