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Yesterday natural gas<\/a> tested support around the 78.6% Fibonacci retracement, and it held. Price was rejected to the upside off a low of 2.55. That low put natural gas below the internal uptrend line, but demand was strong enough for it close just above the line and 34-Day EMA, which provided some optimism for the bulls.<\/p>\n<\/div>\n<\/div>\n Subsequently, on Friday natural gas trades inside the range of Thursday with a high of 2.685 and a low of 2.56. A decisive breakout through either price will provide notice for the next direction. Baring a false move, a rally above today\u2019s high is bullish and could lead to higher prices while a drop through the low points to a test of the 2.55 low.<\/p>\n An upside breakout has natural gas first targeting Thursday\u2019s high of 2.69. A daily close above that high will confirm strength. Higher potential resistance is marked by the top short downtrend line, the 100-Day EMA, and recent daily highs. The swing high and July monthly high is at 2.79. Once that price level is exceeded to the upside natural gas has triggered a continuation of the uptrend. On the way there the 100-Day line will be encountered around 2.73. That price level is followed by a series of lower highs off the July top. Along with the 100-Day EMA they identify a potential resistance zone from 2.73 to the 2.79 peak.<\/p>\n If natural gas breaks through yesterday\u2019s low, it could eventually test support of the lower uptrend line and the area around the 61.8% Fibonacci retracement at 2.42. This would indicate that the recent signs of strength in natural gas are diminishing. Those signs include the new swing high from 28, the recent retracement to the 50% area, which was less of a retracement than the previous two, and a stronger relationship to the 34-Day EMA. Previously, natural gas has fallen below the 34-Day line more significantly than what was seen recently.<\/p>\n Longer term upside target remains the same. The first zone is around 3.00 to 3.03, followed by a range from around 3.23 to 3.31.<\/p>\n For a look at all of today\u2019s economic events, check out our\u00a0economic calendar<\/a>. <\/b><\/p>\n<\/div>\n<\/div>\nNext Signal on Move Out of Friday\u2019 Price Range<\/h2>\n
First Upside Target is 2.69<\/h2>\n
Further Test of Lows Still Possible<\/h2>\n