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Natural gas<\/a> broke out above the two-day high of 2.614 before finding resistance at today\u2019s high of 2.66. The advance also triggered a bullish move above the 34-Day EMA, now at 2.63, and the trendlines. However, the intraday retracement is showing weakness following the bullish advance. A daily close above the two-day high is needed to confirm strength.<\/p>\n<\/div>\n<\/div>\n At the time of this writing, it is looking like natural gas may close relatively weak and fail to confirm strength seen in today\u2019s bullish move earlier in the session. A daily close above the two-day high (2.614) will confirm, however a stronger close would be above the 34-Day line (2.63). Also, the intersection of the two trendlines at 2.60 can be used as a level for the trendlines. The higher the close, the stronger the indication. Further, where natural gas closes within today\u2019s range will provide another clue. At the time of this writing, it is trading below the halfway point of the day\u2019s range.<\/p>\n A close below the two-day high puts the breakout at risk of failure or points to more time being needed before natural gas is ready to complete a bullish reversal. Follow-through will be key. A decisive rally above today\u2019s high of 2.66 will provide a bullish trend continuation signal and a daily close above it will confirm. At that point a bullish reversal will be confirmed and likely complete the recent retracement. Natural gas would then be targeting this week\u2019s high of 2.71, with a likely bullish breakout to follow.<\/p>\n Following bullish confirmation natural gas then heads towards the recent swing high of 2.865 where it might encounter resistance, or it breaks through and provides a new indication that demand is building. The swing high from early-August at 3.02 would subsequently be the target. Now that we have a likely new swing low at 2.50 an ABCD pattern can be added to the chart to provide an initial target. In this case we\u2019re looking for a CD leg of the pattern to match the advance in the AB leg. This doesn\u2019t mean that natural gas cannot exceed the ABCD completion target, just that it is likely to reach it at a minimum. The initial target from the pattern is 2.94.<\/p>\n For a look at all of today\u2019s economic events, check out our\u00a0economic calendar<\/a>. <\/b><\/p>\n<\/div>\n<\/div>\nClosing Price Will Provide a Clue<\/h2>\n
Watching for New Bullish Signal Above 2.66<\/h2>\n
Recent Swing High of 2.865 May Soon be in Sight<\/h2>\n