Resistance Confirmation

Today’s bearish behavior adds to the likelihood that the next lower key support zone may be reached before the current retracement completes. The 61.8% Fibonacci retracement at $3.89 defined this week’s support zone. The reaction of price resistance represented by the 50-day line and a top channel line has shown the sellers remaining in charge. The two indicators show a similar price area for resistance and today’s bearish reaction confirms it. Once prior key support is shown as resistance, the downtrend may be ready to proceed. However, a drop below and daily close below this week’s low of $3.84 is still needed for a bearish continuation signal.

Deeper Support Targets

If natural gas fails to take out today’s high before a new trend low, then the next lower target looks likely to be reached. The 200-day average at $3.58 anchors the next lower price zone, along with a long-term uptrend line and a horizontal level around $3.59. That price area was shown as both clear support and resistance in the past. Most recently with the October high at $3.59.

More significantly, the 2023 peak was at $3.64. If that zone fails to reverse price, then the 78.6% Fibonacci retracement at $3.45 becomes a target. There is also confirmation for the 200-day price zone in the weekly chart as the 50-week and 20-week averages are at $3.63 and $3.61, respectively.

Upside Reversal Requirements

On the upside, a decisive breakout above today’s high would be needed for a bullish reversal. That would put natural gas in a position to challenge resistance near the 20-day average, now at $4.55 and falling.

Outlook

Natural gas’s bounce has stalled exactly at flipped support with a bearish engulfing pattern, reinforcing seller dominance and raising odds of a confirmed break below $3.84. Hold above today’s high to keep countertrend hopes alive; failure opens acceleration toward the powerful 200-day confluence at $3.58–$3.64 and potentially $3.45 if that breaks.