Remains Below 200-Day Moving Average

Since the spike peak of $4.90 (A) was reached briefly in early March natural gas has been in a steady decline that accelerated following an initial pullback and establishment of a lower swing high (C) three weeks ago. It recently confirmed that sellers remain in charge as both the 200-Day MA, now at $3.07, and the January swing low were broken to the downside.

On Monday, natural gas closed below the 200-Day line, and it looks set to do the same today. Being an important long term trend indicator, the 200-Day MA is being tested as support for only the second time since the line was reclaimed in September of last year. It sets the stage for a possible test of support are lower price levels.

Bear Tend Extended

At the same time, the decline is showing signs of getting closer to exhaustion. Until there is a daily close below the $3.23 prior swing low, natural gas remains within a potential support zone that could continue to hold. Although there have not been any signs of buyers stepping in, the decline has stalled at the support zone. If it is sustained, a sign of strength would be indicated on a rally above today’s high of $3.10. Whether that leads to a continuation higher remains to be seen. Of course, as it stands now, a rally above today’s high would put the price of natural gas back above the 200-Day MA. Otherwise, a bearish continuation could see a decline down to the $3.79 price area.

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