Down for Six Straight Days

Nevertheless, natural gas has been falling for six straight days. It may run out of bearish momentum and yet find support that leads to a bullish reversal around the lows. There are no signs of that yet, but a rally above today’s high of 1.97 may signal a bottom and could lead to a test of higher price levels. Following a rally above today’s high natural gas will be heading towards this week’s high of 2.02, followed by the 20-Day MA at 2.09.

Break Below 1.875 Support Targets Lower Prices

On the downside, a decisive decline below today’s low of 1.875 signals a continuation of the bear trend. Whether the downside momentum stalls or accelerates at that point remains to be seen. Supportive of a bearish continuation are the moving averages. Notice that the orange 50-Day MA broke below the blue 200-Day MA yesterday, a sign that the decline is weakening.

The first area to watch for support would then be around a prior interim swing high at 1.85 from April 23. A little lower is the 88.6% Fibonacci retracement of the larger uptrend that began from the April swing low at 1.58. Depending on when it is reached the 88.6% level will likely be nearby potential support represented by the lower uptrend line.

Despite today’s bearish behavior, natural gas is on track to close above the prior swing low of 1.88. That may provide little comfort to the bulls, but it does provide a small indication that buyers may be returning.

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