First Test of 20-Day Support

Price has now reached an important potential support zone defined by the 20-Day moving average at $2.92 and the 50% Fibonacci retracement at $2.91. This marks the first test of support around the 20-Day line since it was reclaimed nine days ago, a development that often carries technical significance. If buyers step in here, the zone could provide the foundation for a bullish reversal. Yet, the conviction behind today’s decline raises the risk that the 20-Day line may not hold, with lower levels likely to be tested before firm support is established.

Additional Support Levels in Play

Should the $2.91 area fail, nearby levels of interest include the interim swing low at $2.87 and the 61.8% Fibonacci retracement at $2.84. Together, these levels form a secondary support cluster that could attract buyers if downward momentum extends. A break below that zone, however, would increase the probability of natural gas testing the $2.62 swing low from late August.

Channel Dynamics and Trend Implications

Another lens for evaluating the current move is the large bearish parallel trend channel that continues to guide price action. The channel has been respected on multiple occasions, with the May corrective low and August swing low both bouncing off support near the lower quarter line. The center line has also acted as both support and resistance in recent months, underlining its importance as a dynamic pivot.

An upside breakout through the center line occurred on August 28, coinciding with the recovery of the 20-Day average — a technically significant alignment. Yet, the recent swing high at $3.20 was rejected at the upper quarter line of the channel, reinforcing resistance and keeping the channel intact. If price revisits the channel’s center line near the 61.8% retracement, traders will be watching closely for signs of stabilization and support from buyers.

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