Support at Channel Low

It may be significant that Wednesday’s low aligned with a lower boundary of a small falling channel, a level that also held during Tuesday’s session. A decisive move above today’s high could prompt a test of prior support levels, which may now serve as resistance. One such area is the anchored volume-weighted average price (AVWAP) line drawn from the 2024 bottom, currently near $2.96. This level coincides with potential resistance around a long-term uptrend line that was recently broken, now at around $3.03.

Resistance Ahead Within a Downtrend

Despite the midweek bounce, the broader technical picture remains bearish. Natural gas confirmed a continuation of its short- and intermediate-term downtrends on Tuesday with a breakdown below the prior swing low at $2.86. While a rebound could develop in the short run, it is expected to face firm resistance within the prevailing downtrend structure. The 20-Day moving average, now at $3.10, represents the most critical dynamic resistance level, and a sustained rally above it would be required to shift sentiment meaningfully.

Lower Targets if Selling Resumes

Should the market turn lower again and break below Wednesday’s $2.76 low, a fresh bearish signal would be triggered. This could set the stage for a decline toward $2.63, completing an initial target for a falling ABCD pattern (purple). Additional potential support sits near the $2.54 level, defined by another 78.6% Fibonacci retracement from a larger prior upswing. Between these levels, a long-term downtrend line may offer interim support as well, but the dominant trend remains to the downside.

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