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Natural gas<\/a> dropped to a three day low today before finding support at 3.225 and bouncing. Support was found prior to reaching the 200-Day EMA at 3.18. This would seem to indicate that demand remains strong as the subsequent advance off today\u2019s low puts the price of natural gas above the halfway point (3.34) of the day\u2019s trading range and it looks like it may close above there.<\/p>\n<\/div>\n<\/div>\n An upside breakout above the current trend high of 3.45 triggers a potential continuation of the rising trend. Natural gas continues to show strength as it is holding above support of the 200-Day EMA and pushing up against resistance around the top trend channel line. Further, the current advance has seen the price of natural gas advance by 36.0%, the strongest advance since the prior downtrend reached a low in April.<\/p>\n The performance of the four prior advances ranged from 21.2% to 34.6%. This points to the strength of the rally, and therefore it may have further to go before it is complete. At the same time, it may indicate that the rally is extended and overdue for a correction.<\/p>\n As of today, the three-day consolidation pattern developing near the top of the current trend is broadening after today as today\u2019s range is outside yesterday\u2019s narrow range. The top of the pattern is the trend high while the bottom is today\u2019s low. However, given that the four-day low is close to the price of the 200-Day line, it may provide a more reliable price level for the bottom of the consolidation pattern. This would mean that an upside breakout is triggered above the trend high while a downside signal would be indicated on a drop below 3.166.<\/p>\n The prior trend high was 3.02 reached in early-August and it is a possible support area during a retracement. Therefore, if weakness comes before a new trend high it wouldn\u2019t be surprising to see natural gas eventually test the 3.02 price area as support. It turns out that the 50% retracement also identifies that price area. A little lower is the completion of the 61.8% Fibonacci retracement at 2.90.<\/p>\n For a look at all of today\u2019s economic events, check out our\u00a0economic calendar<\/a>. <\/b><\/p>\n<\/div>\n<\/div>\nUpside Breakout Above 3.45 Trend High<\/h2>\n
Consolidating Near Trend Highs<\/h2>\n
Support Levels for a Retracement<\/h2>\n