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Downward Pressure Remains
Despite finding support yesterday at the AVWAP, downward pressure remains. Prior support from the January swing low at $2.99 was tested today as resistance, as the high for the day was at $2.98. Moreover, at the time of this writing, natural gas is trading below Thursday’s closing price of $2.94 and it may end the day in a similar position. Each is a bearish sign.
Decline Stalls After 41.7% Drop
Nevertheless, the bearish correction has seen the price of natural gas fall by $2.04 or 41.7% from the recent trend high of $4.90. The decline shows symmetry on a percentage basis with the earlier bearish correction that started following the June 2024 swing high at $3.16. Natural gas declined following that high and eventually established a higher swing low in August.
That low provided the second point to draw a rising trendline across support, which was used to generate the top line of a bullish trend channel. Note that the 2024 decline was the largest since the 2024 bottom, until now. Once there is symmetry in price between swings, there is the potential for support to be seen and possibly the completion of the correction.
Lower Support at $2.79
Furthermore, since the lower line of the trend channel has not been tested as support, while the top line shows resistance a few times recently, there is a chance that the lower line will be tested before the bearish correction is complete. But that is not much lower than current prices. The 78.6% Fibonacci retracement level is at $2.79 and the 127.2% projection for a falling ABCD pattern points to $2.77. Alternatively, the current low continues to hold and a one-day bullish reversal triggers on a move above today’s high. If the 200-Day MA, now at $3.08, is subsequently reclaimed, a bottom may be established.
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