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Buyers Take Control
On Monday, natural gas spiked higher, reclaiming the 200-Day MA at $3.08 during the advance and rising to an eight-day high of $3.37, at the time of this writing. It looks to be rapidly heading towards a test of resistance around the 20-Day MA, now at $3.47, or to the middle of a long-term rising trend channel (dashed line). Also, a minor interim upswing at $3.61 can be used as a proxy for the middle line of the channel.
In addition, the 2023 peak was at $3.64 and close enough to be included in a potential resistance zone from $3.61 to $6.64. Since the 20-Day MA is falling, it may represent a slightly lower price by the time it is reached. Nonetheless, the 20-Day line has not been well recognized by the market recently. It can still provide clues regarding the strength of demand but doesn’t deserve the same attention as when it has previously represented trend support more clearly.
Reclaimed 200-Day Moving Average
Signs of improving bullish momentum can be seen in the relative strength index (RSI) momentum oscillator as a fourth touch of the trendline was made today. A clear breakout above that line will provide further evidence for improving bullish momentum. It is also interesting to see the relationship with the 200-Day MA. The 200-day line failed as support a week ago and natural gas traded under the 200-Day line for most of the week. Since the low of Monday was $3.05, a successful test of support around the 200-Day MA, now at $3.08, was completed and it was followed by clear bullish momentum.
For a look at all of today’s economic events, check out our economic calendar.
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