Confirmed Bearish Signals

Friday’s closing price is on track to be the third day out of four where natural gas closed below prior support at the 200-day average, now at $3.75, and a long-term rising trendline. Daily closes below the 200-day line and trendline is bearish behavior as prior dynamic support switches to resistance. Now the 20-day average has touched the 50-day average, and it will soon cross below it, further confirming bearish sentiment.

Downside Risk Remains

Despite being possibly extended to the downside, bearish price action shows the potential for further downside. Given the current chart pattern, unless natural gas can rise above and then close above Thursday’s lower swing high of $3.93, downside pressure remains. However, given Thursday’s relatively large range, natural gas could continue to consolidate at support seen near the 61.8% retracement.

Deeper Support Targets

A decisive drop below today’s low, also a weekly low, at $3.60, triggers a continuation of the bearish retracement. If price then continues to weaken, the next lower potential support zone around $3.48 to $3.44 becomes the next downside target. The beginning of the range is a 78.6% Fibonacci retracement of an internal upswing, while the lower boundary was resistance at the swing high in early-September. If that price zone fails to attract buyers and natural gas continues to weaken, the 78.6% Fibonacci retracement of the last full upswing becomes a potential target at $3.48.

Upside Resistance

On the upside, if a rally above $3.93 can be sustained, then potential resistance from prior support at $4.09 to the 38.2% Fibonacci retracement at $4.15 is identified as the first potential resistance zone. But the also significant 20-day average presents dynamic resistance, and it is at $4.24 currently and falling.

Outlook

Natural gas remains under bearish pressure with multiple closes below the 200-day average and trendline, but the hammer off the 61.8% Fib and hold above $3.60 offers early hope for consolidation or bounce. Clearance of $3.93 targets $4.09–$4.15; failure to defend $3.60 opens $3.44–$3.48 and keeps the retracement alive.

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