Highest Daily Closing Price in 59 Days
On Monday natural gas ended the session at its highest daily closing price in 59 days. Along with today’s new recent high, it looks like it is telegraphing higher prices. If it continues to rise, and there is a good chance it will, the next higher ABCD pattern target is up at 2.20. That price is within a target zone from around 2.17 to 2.24 and it includes the 38.2% Fibonacci retracement at 2.24.
Further up is the price area around the 200-Day MA at 2.48. Notice that the moving averages are showing improving demand. Recently, the purple 8-Day MA crossed up through the orange 50-Day MA after being below it for some months. Further, the relative strength index momentum oscillator (RSI) recently broke a trendline to the upside.
Below 1.91, Likely Leads to Test of Support Lower Down
Ideally for the bulls, natural gas stays above the April 26 gap day low support price of 1.91 during retracements. If so, the above bullish case becomes more likely and may occur faster than otherwise. However, if the 1.91 price level fails to act again as support and is broken to the downside, a test of lower price levels becomes likely. Lower meaning, from 1.90 to the 1.61 closing price from the day before the gap. The April 23 high of 1.85 and the 20-Day and 50-Day MAs from 1.80 to 1.78 are two price areas that stand out.
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