Monthly Bear Trigger

Furthermore, a bearish monthly breakdown (not shown) triggered today as last month’s low of $2.97 was breached. That put natural gas at four-month low and falling. Prior monthly support was seen at the $2.86 low in April, and it looks likely to be challenged if downward pressure remains. That is a five-month low. The trajectory of the current decline also looks like it may be heading to a test of support around the 20-Month MA, now at $2.85. Since the two price levels are so close together, that price zone deserves particular attention, if it is approached.

Symmetry Points to $2.63

In addition, there is an initial target for a falling ABCD pattern (purple) at $2.63. That is where there will be symmetry in price compared to the first leg down (AB). Once that occurs a key potential pivot is identified. Finally, there is a second 78.6% retracement level, a little lower at $2.53. It measures a larger upswing than the prior 78.6% level.

Fast Recovery Could Change Bearish Outlook

An alternative to the above bearish scenario would be a relatively quick recovery of the AVWAP line and a daily close above it. That should then be followed by a recovery of the long-term uptrend line and a close above it, as well as above the prior trend low at $2.97. A bearish closing price today, in the lower third of the day’s range, keeps the sellers in charge and the lower price targets in sight.

For a look at all of today’s economic events, check out our economic calendar.