Bearish Structure Still Dominates

Despite today’s rebound, natural gas remains entrenched in a broader downtrend. Bearish confidence increased after a long-term dynamic support zone was decisively broken on August 12. Following that break, the anchored volume weighted average price (AVWAP) that once provided support flipped into resistance, capping further upside attempts and leading to fresh selling pressure that drove today’s new trend low.

Measured Move Target Reached

Monday’s decline completed a 100% projection of a falling ABCD pattern at $2.63. While this target often marks a potential pivot, confirmation is lacking. Broader bearish signals remain intact, including the recent break below the April swing low at $2.86, which confirmed trend continuation. Today’s price action shows the market recognized the price level. With larger patterns pointing lower, traders should view the $2.63 level as an interim step within a continuing bearish structure.

Falling Wedge Pattern Developing

Short-term trendlines outlining recent consolidation suggest a possible bullish falling wedge is forming. This pattern would remain valid even if natural gas declines further toward the next lower target zone between $2.54 and $2.51. This range is defined by the 78.6% Fibonacci retracement at $2.54, reinforced by a declining trendline from the 2023 peak. The confluence of technical factors makes this zone a likely magnet for price action in the near term. Once the price zone is reached, if the wedge remains intact, an upside breakout could signal a bullish reversal.

Outlook: Watching Key Support

Although today’s low matched an ABCD projection, there has been no confirmation of a sustainable pivot. The lower $2.54–$2.51 support zone remains the more technically significant area. Until natural gas can reclaim and hold above $2.72, sellers remain firmly in control, with risk skewed toward a test of deeper support before any meaningful bullish reversal is likely to develop.

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