The first wedge target could experience a retreat

This price level of 2.27 was resistance on July 22. It also marks the start of a bullish descending wedge pattern (orange boundary lines). The start of the wedge is usually the minimum target for the pattern. This target of 2.27 was arguably reached with today’s high of 2.26. After today’s close, a drop below the daily low of 2.155 will trigger a daily bearish reversal. The 20-day MA is the first obvious target at 2.09.

20-day MA is a crucial short-term support

A short-term bullish outlook would be maintained as long as natural gas remains above the 20-day line, which had marked trend resistance since late June until last Thursday’s bullish breakout. Subsequent rejection of price on approach to the upside will confirm that the 20-day line has changed to a line of potential support.

This would be bullish behavior that could mark the end of a correction. However, there is also a possible support zone further down at around 2.03 to 2.02. This area starts from last Thursday’s low and has been an area of ​​daily support or resistance more than several times over the past month.

Weekly bullish reversal points to higher prices

If there is a pullback before moving above the interim swing high of 2.27, it is expected to eventually resolve to the upside as a bullish reversal could still be in the early stages. In addition to a bullish wedge breakout last week, natural gas also triggered a bullish reversal on the weekly chart. Today’s surge further confirms the breakout. It was the first time in eight weeks that a previous week’s high was exceeded to the upside. This is bullish behavior that occurs on the longer time frame chart and is more significant than the daily and lower periods.

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