Drop Below 2.31 Points to Retracement

A retracement is first indicated on a drop below today’s low of 2.31. Prior swing highs and lows then mark possible support levels starting with 2.23, which was a swing low in December. Then the level is a little lower at 2.21, followed by 2.18. This is the fourth consecutive week of positive performance for natural gas. Although the week is not over, it is currently trading near the highs of the day, and it is well on track to hit the 2.46 target zone. The 20-Day MA is a way lower at 2.04. It wouldn’t be surprising to see the 20-Day line tested as support if a retracement does come.

Key 2.46 Pivot Approached

Although the 2.46 price area is a key pivot, price action will leave clues as to what might be coming. Given the strength of the advance so far, might natural gas be able to breakout above the 200-Day line? Given the confluence of indicators highlighting a resistance zone from 2.37 to 2. 49, an upside breakout seems less likely, but it is possible. Or a brief consolidation and/or retracement could follow a test of the 200-Day line.

In this case, natural gas would be heading up towards the 61.8% Fibonacci retracement level. The 78.6% Fibonacci retracement follows. Also, a rise to test the top channel line could be in the works. If reached today the top channel line would match the 78.6% retracement level. Let’s watch the reaction of price upon approaching the 200-Day line for further insights.

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