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Natural gas<\/a> spiked higher today with an opening gap before breaking out of the top of a rising trend channel. Resistance was seen at the day\u2019s high of 3.64, leading to a retracement. The gap took natural gas above the top boundary line of the channel. At the time of this writing, it is pulling back into the gap and is already testing support of the recent trend high at 3.47. There is now a big gap to fill, and a drop below today\u2019s low next week will indicate a continuation. Today is on track to finish with a bearish inverted hammer candlestick top.<\/p>\n<\/div>\n<\/div>\n Today\u2019s low so far is 3.46 and natural gas continues to trade near the lows of the day. Therefore, a decisive drop below today\u2019s low starting next week confirms a continuation of the retracement into the gap. There is a good chance the 200-Day EMA may also be tested as support given its significance. It happens to match the 61.8% Fibonacci retracement at 3.17. Both indicators point to the same price. Many times, having two or more indicators identifying the same price acts as a magnet, pulling price towards it.<\/p>\n Concurrently, today\u2019s opening gap and bullish channel breakout shows strength, which means following a retracement, natural gas should be ready to continue its advance. An upside channel breakout is consistent with other recent bullish developments. Specifically, the 50-Day EMA (orange) was successfully tested as support at the most recent swing low of 2.86 and it preceded a sharp advance over the past couple of days. Yesterday\u2019s close above the 200-Day EMA and the increased slope of the uptrend line as shown by the recent internal trendline are two additional bullish developments.<\/p>\n Natural gas was up as much as 27.3% from that low at today\u2019s high. That\u2019s a strong advance in only four days. For this reason alone, the chance of a retracement further into the gap seems likely. Certainly, if a continuation higher happens before then it is at risk of not being able to sustain upward momentum in the short-term.<\/p>\n For a look at all of today\u2019s economic events, check out our\u00a0economic calendar<\/a>. <\/b><\/p>\n<\/div>\n<\/div>\nDrop Below Today\u2019s Low Next Week is Short Term Bearish<\/h2>\n
Channel Breakout Shows Strength but Need Further Confirmation<\/h2>\n
Sharp 27.3% May Need a Rest<\/h2>\n