Challenging Channel Support

If natural gas retains a pattern of higher swing lows, the uptrend has a chance of being sustained. Although a lower rising channel line has failed to retain support, there is a longer trendline slightly below Monday’s low of $3.28. A failure of support at the lower trendline opens the door to a 78.6% retracement target of $3.13 and an initial target for a falling ABCD pattern at $2.97. That price area may have some significance as it is also marked by an AVWAP price level at $2.95 currently.

The indicator is anchored at the February 2024 trend low, so it has long-term significance. However, it was also confirmed twice as support. Recently, the swing low in April found support at the AVWAP line (light blue) and earlier in October 2024. Since the ABCD target and AVWAP indicators point to a similar potential support area, it could act as a magnet for price.

Above $3.47 Gets Buyers Interested

On the upside, a two-day bullish reversal will trigger on a rally above Monday’s high of $3.47. An interim lower swing high is the first target at $3.57. It is followed by a lower swing high at $3.75. A sustained advance above $3.75 is needed before natural gas shows strength that could lead to a challenge of recent trend highs at $4.15.

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