Welcome to Extreme Investor Network, where we provide you with unique insights and analysis on the stock market, trading, and all things Wall Street. In today’s post, we will be discussing recent developments in the natural gas market and how it is impacting traders.
Recent attempts to strengthen the price of natural gas have been met with resistance, as indicated by the failure to create a higher swing high compared to March 1st. The lower swing high signals continued downward pressure on the price of natural gas. Additionally, the price was met with resistance below a lower blue dashed parallel channel line, further confirming the bearish trend.
The moving average support zone, comprised of the orange 50-Day MA and purple 20-Day MA, failed to provide support as expected. The convergence of these indicators suggested a potential rejection to the upside, but instead, a bearish breakdown occurred, aligning short-term price action with the larger bearish trend. A drop below the most recent swing low at 1.59 confirmed the bearish sentiment.
Despite the bearish pennant pattern, the market is likely to remain range bound until a breakout occurs. If the pattern continues to evolve, choppy trading within its boundaries is expected. A bounce off the lower boundary line could lead to a test of resistance at the top line of the pattern, potentially triggering a bullish reversal. An upside breakout would be confirmed with a rally above the most recent swing high at 1.94.
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