Weekly Breakout Remains Intact

Today’s price action builds on momentum first triggered by a bullish engulfing candlestick three weeks ago on the weekly chart. That pattern engulfed two prior weeks and closed above their highs, creating a more decisive bullish signal than usual. The accompanying breakout from a falling wedge has maintained credibility, and Tuesdays outside day validates the continuation of that earlier pattern’s implications.

Key Levels to Watch

Where natural gas finishes Tuesday will help define support and resistance dynamics. Holding above the 50-Day line at $3.07 and Monday’s high of $3.06 underscores short-term strength. More critically, sustained trade above $3.12 and eventually $3.20, the recent swing high, would clear the way for higher targets. Multiple failed recoveries of the 50-Day line in prior weeks raises the significance of today’s potential close above it.

Upside Potential from Channel and ABCD Pattern

The recent pullback now appears complete, marked by a successful test of confluence support around the 20-Day average, the 61.8% Fibonacci retracement, and the midpoint of a falling channel. That back test strengthens the case for a move toward the channel’s upper boundary.

An ABCD pattern that includes today’s $2.87 low projects an initial target of $3.45. This aligns with both the 200-Day moving average, now near $3.50, and the upper area of the channel, creating a high-value target zone if $3.20 resistance is broken.

Weekly Closing Setup

Heading into midweek, bulls aim to confirm strength by holding gains above $3.07 and pressing through $3.20. A close above those levels would reinforce the bullish structure and open the door to the higher $3.45 – $3.50 objective.

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