Welcome to Extreme Investor Network, where we provide you with unique insights and expert analysis on all things related to the stock market, trading, and Wall Street. Today, we are talking about a possible symmetrical triangle breakout in natural gas that could signal a bullish reversal.
Natural gas has been consolidating in a symmetrical triangle pattern for over six months, with a new and higher bottom line added in late August. The recent rally from the late-August low has opened up the possibility of a test of resistance at the top downtrend line. Once price reverses from the low end of a consolidation pattern, the chance for a move to the opposite side of the pattern increases.
Today, natural gas is very close to the top trendline, and despite finding resistance at the interim swing high, the bullish momentum is strong. The top trendline may be hit in the coming days, leading to a breakout through the line. A wide range green candle and a strong close near the highs for the week are expected for today.
However, there is a possibility that a breakout above the trendline may not see enough buying pressure to support higher prices before a pause or retracement. The top line could retain resistance, leading to a retracement before attempting an upside breakout. The first higher target after a breakout is around 3.45, with other prior swing highs as potential targets as well.
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