Key Short-Term Support Zone in Focus
Near-term support is at Tuesday’s low of $3.17, although recent daily price action has defined a broader support zone extending down to last Tuesday’s low of $3.15. That price zone is marked with a short trendline, which gives greater significance to the $3.15 level, as a drop below it would also trigger a trendline break.
Resistance Levels Define Breakout Threshold
Since an upside breakout of a short downtrend line was solidly rejected, further downside seems more likely than upside. Nonetheless, that could start to change quickly with a rally above Tuesday’s high of $3.31. If strength continues, the downtrend line may be challenged again and potentially lead to a break above Monday’s high of $3.38.
Nonetheless, potentially significant resistance remains near the recent high of $3.42 and up to the 200-day moving average resistance zone, now near $3.44.
Broadening Wedge Structure Near Completion Zone
During the advance that followed the April low, natural gas has formed an ascending broadening wedge. Since the boundaries of the pattern have not been violated, it may continue to develop and support higher price extensions in the near term. However, as this advance is occurring within a broader consolidation phase, an eventual test of the upper boundary would not necessarily imply continuation; rather, it would suggest that natural gas is approaching conditions consistent with a potential medium-term exhaustion zone.
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