Welcome to Extreme Investor Network, where we provide valuable insights and analysis on the stock market, trading, and all things related to Wall Street. Today, we are diving into the recent bearish weekly pattern that has emerged in the natural gas market.
A daily bearish shooting star pattern was triggered as natural gas dropped below Thursday’s low of 2.19. This came after a rally that tested resistance around the July swing high of 2.27 but was quickly met with resistance, leading to the formation of a weekly shooting star candle. This pullback is considered normal after the first rally off the bottom retraces prior gains.
As we analyze the technical indicators, it is important to watch the 20-Day MA and the 50% retracement zone at 2.09. If the 50% level fails to hold as support, the next lower target zone could be around the confluence of the 61.8% Fibonacci retracement at 2.04 and prior daily support and resistance levels.
Despite the bearish weekly pattern signaling a potential reversal, it is important to note that this pullback is occurring following a strong bottom and a bullish breakout from a falling wedge pattern. This indicates that the pullback is likely temporary, and the bullish trend may resume in the near future.
Looking ahead, once the pullback completes, natural gas could start to move towards higher price levels, with the 200-Day MA currently at 2.335 serving as the first test of resistance. This level may initially reject price to the downside, but as the pullback progresses, we may see the 200-Day line converge with this week’s high, providing a more significant pivot point.
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