Trend Support Leads to Rally

On Friday, natural gas closed below the 20-Day MA, a bearish sign. Of course, today’s bullish reversal negates that potential bearish clue. It is interesting to note the on each of the past three pullbacks, there was only one day that closed below the 20-Day line, and then it was quickly followed by a reclaim of the 20-Day line and a daily close above it. That is the situation today.

Bearish Weekly Shooting Star Pattern is a Concern

Of concern is the bearish shooting star weekly candlestick pattern (not shown) that completed last week. It includes a long top shadow followed by a close near the lows of the week’s price range. Whether silver resolves to the downside or upside, it adds risk to the rally. A new trend high is not triggered until there is a rally above last week’s high of 4.20. That is a way up.

200-Week MA is at 3.88

Before encountering potential resistance around the trend high, the 200-Week MA would need to be reclaimed. It is now at 3.88. It should be noted that the 200-Week line was reclaimed in each of the past two weeks but there has not yet been a weekly close above the 200-Week. Therefore, another daily close above the 200-Week line at 3.88 would show strength. Maybe, enough strength to see a challenge to the recent trend high. Until then the expectation is for choppy trading with last week’s price range of 4.20 to 3.33.

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