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Potential Higher Target
An initial target from the bull wedge is the beginning of the wedge at $4.26. That target was essentially satisfied today. Nonetheless, that doesn’t mean the advance is over, but maybe natural gas takes a rest first via a pullback or consolidation before attempting higher prices. Also, when adding the height in price to the breakout level, an alternative potential target of $4.40 is established. As with all targets they are estimates that may or may not be reached.
Drop Below $4.06 Points to a Likely Pullback
A decline below Monday’s low of $4.055 is a sign of further short-term weakening that could lead to a move lower to test prior resistance areas as support. Two initial price areas to watch for signs of support include prior support from the mid-March interim swing low at $3.96, and the 50-Day MA, now at $3.87. It is interesting to note that the breakout of the top line of the wedge occurred at a similar price area.
Following the reclaim of the 50-Day MA on February 13, the 50-Day line successfully tested as support in early-March and a higher swing low was established. Although the recent decline failed to find support at the 50-Day MA, the subsequent quick bullish recovery can be viewed as a successful test of support at the 50-Day line.
For a look at all of today’s economic events, check out our economic calendar.
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