Weekly Structure Points Toward Higher Resistance

The weekly chart also supports the potential for an eventual resolution to the upside above $3.298. Last week, a bullish continuation signal was confirmed by a weekly close above the prior week’s high of $3.18. This resulted in a higher weekly low and higher high, suggesting that the weekly bullish trend was continuing after a higher swing low formed at $2.817 (A) last month.

If the bullish advance resumes after the current short-term consolidation, the September high of $3.317 and June high of $3.396 define a range of potential resistance. In addition, a measured move points to $3.41 as a potential upside target. Because this target is relatively close to the July high of $3.396, the two levels form a potential resistance zone between $3.396 and $3.41. A test of that zone could therefore mark the next significant challenge for buyers if natural gas breaks above the nearer resistance levels. For now, the ability to hold support near $3.10 and break above $3.204 remains important to the bullish outlook.