[ad_1]
\n<\/p>\n
An ongoing retracement in natural gas<\/a> continues with a drop below Thursday\u2019s low. Support for the day was seen at a low of 2.54, followed by an intraday bounce. The initial falling ABCD pattern target was 2.57 and it was exceeded to the downside. Therefore, lower price levels are now more likely to be reached.<\/p>\n<\/div>\n<\/div>\n There are two primary target zones identified on the chart and each is the convergence of two Fibonacci levels. The Fibonacci levels are based on a retracement, and the extension of the ABCD pattern. In addition, the first and higher price zone also includes the 34-Day EMA. The basic measure for the ABCD pattern is to identify when the CD leg matches the price appreciation of the AB leg. It reflects the similarity between swings. We can also extend the CD leg based on Fibonacci ratios of 127.2% and 161.8% to identify higher targets. Each ratio is multiplied by the distance of the AB leg to reach the extended price. The first target zone is from 2.51 to 2.49, and the second from around 2.42 to 2.40.<\/p>\n Certainly, natural gas does not need to fall to those price levels. Support and a bullish reversal can be seen prior to those levels being reached. In this case, a daily close above today\u2019s high of 2.68 provides a bullish signal. At the time of this writing natural gas is close to closing near potential support of the initial ABCD pattern target around 2.57. If it does close above that price level it would be a minor bullish sign, possibly enough to get upside momentum going again.<\/p>\n Let\u2019s now look at the current retracement relative the two prior to see if it provides any insight. Based on time, the current retracement is on its sixth day while the prior two completed in eight days and five days, respectively. This means that the current retracement is longer than the first but shorter than the most recent one. When considering performance, the current retracement has been down as much as 11.9%, while the prior two were down 20.5% and 19.7%. These relationships show relative strength in the current retracement compared to the previous two.<\/p>\n For a look at all of today\u2019s economic events, check out our\u00a0economic calendar<\/a>. <\/b><\/p>\n<\/div>\n<\/div>\nTwo Core Support Zones<\/h2>\n
Breakout Above Today\u2019s High is Bullish<\/h2>\n
Relative Strength Reflected in Current Correction<\/h2>\n