20-Day Moving Average as Initial Test

The short-term picture highlights the 20-Day moving average as a critical resistance line, now sitting near $3.02. A decisive move above today’s $2.92 high would be encouraging, but the real short-term test remains Friday’s $2.97 peak. That level coincided with an anchored VWAP (AVWAP) measured from the long-term 2024 bottom – a line that previously provided support on two occasions during bearish corrections the past year. Its breakdown last week and subsequent test as resistance signals a shift in market control back to sellers. For now, the AVWAP at $2.96 and the declining 20-Day average create a tight overhead resistance zone.

Bulls Need Stronger Confirmation

Reclaiming the 20-Day line is essential for bulls to regain momentum, and even then, natural gas would quickly confront another key barrier at the lower swing high of $3.15. A sustained rally above this zone would signal a potential bullish reversal. Until then, the broader structure still leans bearish, with rallies facing headwinds from declining averages and confirmed resistance zones.

Downside Targets If Support Breaks

On the downside, a drop below Monday’s $2.80 low would indicate fresh weakness, but a confirmed continuation only unfolds if the $2.76 support gives way on a daily close. Should that occur, attention turns to Fibonacci-based targets tied to an extended ABCD pattern from the March peak. The large ABCD projects a 78.6% extension aligning near $2.51, which also matches a 78.6% retracement and a 127.2% target from a smaller ABCD formation. This confluence strengthens the case for $2.51 as the next major bearish objective if support fails.

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