Natural Gas Market Update: Bullish Signals Amid Resistance Levels
At Extreme Investor Network, we pride ourselves on delivering the insights that empower our readers to navigate the stock market effectively. Today, we’re diving into the recent developments in the natural gas market, where bullish signals are emerging amid notable resistance levels.
Market Momentum: A Three-Day High
Today’s activity marks an exciting bullish reversal for natural gas. Last Thursday’s low of $3.44 has established a higher swing low, setting the stage for a near-term uptrend. This structure is nested within the developing CD leg of a potential rising ABCD pattern—a classic technical formation that traders often exploit. The ABCD pattern is currently situated within a bullish trend channel, beautifully illustrated in light green on our charts.
What makes this setup particularly intriguing is the robust support observed during the latest bearish pullback. The price found solid footing at the confluence of a 50% retracement level, the 20-day moving average (MA), and the anchored volume-weighted average price (AVWAP) from the May swing low (A). This convergence of support signals a strong underpinning to the current market momentum, suggesting further potential upside.
Challenging Resistance: The $3.84 Milestone
With a compelling bullish reaction from the support zone, natural gas appears ready to challenge the lower swing high of $3.84 (B). A decisive breakout above this threshold would not only confirm the ABCD pattern but also establish a higher swing high. Traders should keep a close eye on daily closes above this level, as they would validate the bullish sentiment surrounding natural gas.
The initial target zone for further advances is between $4.08 and $4.12, aligning with both the ABCD pattern’s target and the 61.8% Fibonacci retracement level. Resistance near the upper boundary of the trend channel may also provide critical insights into market supply and demand dynamics, especially if this level coincides with other confirming indicators as price approaches.
Resistance Ahead: The Right Shoulder
As natural gas continues its ascent, it will likely encounter significant resistance near the interim swing high of $4.25. This price point coincides with the formation of the right shoulder in a recent head and shoulders bearish reversal pattern, highlighting a lower high formed during the bearish correction that followed the $4.90 peak in March. A violation of this bearish structure would signal bullish continuation and offer another encouraging reversal signal for investors.
Stay Informed with Our Economic Calendar
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In conclusion, while natural gas shows promising bullish strides, traders should remain vigilant about key resistance levels and emerging patterns. Armed with this information, you’ll be better positioned to capitalize on opportunities in the dynamic world of commodity trading. Thank you for being part of the Extreme Investor Network community!