[ad_1]
\n<\/p>\n
Nonetheless, Monday\u2019s bullish action showed strength, but the day ended weak. Natural gas closed below the midpoint of the day\u2019s trading range. The current bounce off support around the 61.8% Fibonacci retracement last week should have more upside to go. An advance above today\u2019s high of $3.35 would provide the next sign of strength, followed by Monday\u2019s high at $3.41.<\/p>\n
First, it will have to challenge a potential resistance zone from $3.51 to $3.52, consisting of the 38.2% Fibonacci retracement and the 50-Day MA, respectively. Certainly, it looks likely that price zone will be tested as resistance. And be aware there is a downtrend line near to the 50-Day line. It can be used to help gauge strength or weakness.<\/p>\n
The price area around the 20-Day MA, now at $3.69, would be the next higher potential resistance zone. But the 50-Day line generally has greater significance for the bull trend. In the bigger picture, following a bullish breakout it is common to eventually see a bearish correction to test that prior resistance area and see if it now represents support. And there are different degrees of retracement, which can provide clues as to strength or weakness.<\/p>\n
Natural gas broke out of large symmetrical triangle pattern November 20 last year and that led to a rally to a peak of $4.37. The breakout level was $3.02 and last week\u2019s swing low was $2.99. Support was seen in the around confluence of the 61.8% Fibonacci retracement at $3.03, a rising trendline, and a key prior resistance level.<\/p>\n
Although trendlines generally don\u2019t provide good signals by themselves, they can assist the analysis. Notice that a downtrend line and uptrend line are converging on February 18. This means that one of those lines is broken before then and that could provide further clarity.<\/p>\n
For a look at all of today\u2019s economic events, check out our\u00a0economic calendar<\/a>. <\/b><\/p>\n<\/div>\n