Key Support at Last Week’s Low of $3.37

Last week’s higher swing low at $3.37 is more significant support as it is now part of the near-term bullish trend structure of higher swing lows. A bullish reversal following today’s low will be needed to further confirm trendline support. Support last week was seen at the confluence of the 61.8% Fibonacci retracement and the 200-Day MA. It was followed by a sharp one-day bullish reversal last Friday, which ended near the highs of the day.

The sharp bearish reversal seen today might be part of a shakeout before natural gas continues higher or the early signs of additional selling pressure that could lead to a break below the 200-Day MA and last week’s low. However, until then, the expectation is for the bullish trend to continue. It is contained within a long-term bull trend that began from the February 2024 lows.

Short-term Consolidation

On the daily chart, strength is not indicated until there is a rally above Friday’s high of $3.75. Therefore, given the relatively large price range for today, natural gas could trade within the range for a few days while it further test areas of dynamic support. Given its long-term nature and widespread use, the 200-Day is clearly showing support and needs to be respected unless signs of failure appear.

Finally, be aware that the swing low from last week is also a weekly low. Therefore, it takes on additional significance if it fails to hold. Moreover, that increases the chance for support to hold above that low as last week ended in a relatively strong position, in the top half of the week’s trading range.

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