Short one-day pullback

Yesterday, a one-day decline was reversed, creating a trend continuation signal. This was further confirmed by today’s move to a high of 2.30. Resistance was found at that high, followed by a drop below the 2.27 pivot. At the time of writing, natural gas is likely to end Thursday’s trading session below the 2.27 level as it trades within the lower half of the daily range. Nevertheless, a new higher daily rise and higher low should be made today.

Possible support starts at 2.13

Given the quick recovery of the uptrend after a one-day decline, it is likely that natural gas prices will continue to rise before a more significant decline occurs. Still, there are some potential support zones to keep an eye on. First, there is Tuesday’s pullback low of 2.13. This is quickly followed by the 20-day MA at 2.10. There is also the 50% retracement level at 2.07.

The positive side

On the upside, natural gas has risen after falling 40.2% from the June 11 swing high at 3.16. That high was a failed bullish breakout attempt above a previous trendline (blue dots). It remains on the chart only as additional guidance. The current rise has the potential to re-attempt a breakout above the upper trendline, which was redrawn to account for the June 11 lower swing high. Therefore, the outlook for natural gas remains bullish.

The first upside targets start with the 31.8% Fibonacci retracement at 2.37. Given the potential upside momentum, it is likely that this price level will be breached. The 50-day MA is then at 2.40. Since the 20-day MA has been breached, the 50-day line at 2.52 becomes the next moving average target, along with a previous pullback low at 2.475.

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