20-Day MA at 2.57 Marks Support

Both the 20-Day and 50-Day MAs were reclaimed and now represent potential support. The 20-Day line is at 2.57 and the 50-Day line at 2.43. Support could be seen around either moving average if a bearish pullback occurs. Further, a minor swing high is near the 20-Day level at 2.58. Finding support around the 20-Day MA would be a stronger indication than if natural gas falls to test support around the 50-Day MA.

Bull Breakout Above 2.89

Although a bearish pullback may occur prior to an upside breakout, the breakout could happen sooner. Strength is next indicated by a rally above today’s high of 2.89, which would provide the first indication of a potential upside breakout of the triangle. However, since the recent high of 3.02 is near, it needs to be exceeded for a higher confidence level that a breakout may be sustained. Today is essentially the fifth attempt to challenge resistance around the top trendline. Therefore, it has a chance of being successful if it triggers. Until then natural gas remains inside a consolidation range.

Indications of Underlying Strength

The recent higher swing low shows strength and is a clue that supports an eventual bullish resolution of the consolidation phase. Moreover, the 200-Day MA was recently successfully tested as support and each time price rallied. Natural gas has been flirting with the 200-Day line since a bull breakout in September 2023.

At some point natural gas will move into a trending environment and the recent test of support at the 200-Day line may turn out to be the beginning of that process. Note that the recent test of support at the 200-Day line followed a rally higher. Each of the previous three approaches to the 200-Day line led to a breakdown below the line. A change of character may now be beginning.

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