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Natural gas<\/a> sees increased volatility as it forms an outside day. Earlier in the session it advanced to a new trend high and got back above the trend line but was quickly met with resistance at a high of 2.997. Subsequently, sentiment switched to bearish and natural gas sold off, breaking below yesterday\u2019s low of 2.87 before finding support at the day\u2019s low of 2.855 and bouncing.<\/p>\n<\/div>\n<\/div>\n Today\u2019s candle is red for the day, but if natural gas can close in the top half of the day\u2019s range it may have a chance to continue to advance. However, as of today\u2019s high it was up 17.4% from Tuesday\u2019s low and may need a bit of a rest before it is ready to continue. The halfway point for today\u2019s range is 2.926, if a new low or high is not made prior to today\u2019s close.<\/p>\n<\/div>\n<\/div>\n An advance above today\u2019s high triggers a possible advance. If natural gas can then maintain strength, it has a chance to reach the next two price targets. The first target is at the August 9 swing high of 3.02. A daily close above that level will confirm a continuation of the larger trend rising from the April 14 trend low as it will trigger a higher swing high.<\/p>\n Today\u2019s high was very close to that price level. Subsequently, the completion of a rising extended ABCD pattern provides a target at 3.06. The CD leg of the pattern has been extended from the AB leg by the 127.2% Fibonacci ratio. Wednesday\u2019s rally reached the initial target for the ABCD pattern at 2.95 where the two legs of the pattern are equal. Subsequently, over the past two days the 2.95 price area continued to be tested as resistance.<\/p>\n Also of note, is the price behavior as seen in the weekly chart. This week\u2019s rally put natural gas at a 29-Week high, and it is on track to end the week with the highest weekly closing price over that period. This behavior reflects increasing demand for natural gas and improves the chance that it can trend higher. A close today below 2.87 would negate that bullish indication.<\/p>\n Alternatively, a deeper pullback is likely on a drop below today\u2019s low. The trendline is the nearest support area of interest but that may be broken to the downside, in which case natural gas may move into the area of this week\u2019s gap.<\/p>\n For a look at all of today\u2019s economic events, check out our\u00a0economic calendar<\/a>. <\/b><\/p>\n<\/div>\n<\/div>\nRally Above Today\u2019s High Points to Higher Targets<\/h2>\n
Weekly Chart is Bullish<\/h2>\n
Deeper Correction Signaled on Drop Below 2.85<\/h2>\n