Bearish Behavior

Today’s bearish behavior sets the stage for a potential test of support around the 50-Day MA, now at $3.52, and the 20-Day MA, currently at $3.51. Weekly support from this week is at $3.50. Despite the potential for eventual higher prices, as indicated by the larger price patterns, bearish price action today could postpone the potential advance. The 50-Day MA was reclaimed for a third time since the April breakdown on Monday. So, it represents a key price level to help determine the health of the trend.

Breakout Above $3.84 Targets $

Nonetheless, a decisive breakout above this week’s high, prior to a deeper pullback, will provide a new bullish signal. That would put natural gas in a position to likely break out above the $3.84 swing high. A rally above that high will trigger a continuation of the rising ABCD pattern that points to an initial minimum target of $4.08. Since the 61.8% Fibonacci retracement is near at $4.12. The two price levels can be seen as a potential resistance range.

Key Support at $3.44

Since the higher swing low in May, natural gas has advanced with two upswings, each followed by a two-day pullback. The most recent pullback found support at the higher swing low of $3.44 and created a higher swing low. That marks a key potential support level as it is part of the near-term price structure. If it is broken to the downside, further bearish behavior might follow. Therefore, it is a maximum low for a deeper bearish pullback before the bullish outlook weakens.

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