Resistance Levels Define the Reversal Path
The prior trend low at $2.72 is now near-term resistance that may be tested as resistance during short-term strength. More significant resistance, however, sits at the lower swing high of $2.91, as a recovery of that level will trigger a bullish reversal of the very short-term downtrend and confirm a reclaim of the 20-day moving average, now at $2.87 and falling.
Volatility Returns to the Market
Before the recent consolidation, which followed the interim swing low of $2.81 from late-February, natural gas exhibited very high volatility through an upswing, a downswing, and another upswing that ended with a lower swing high in January. Now that natural gas has broken out of that recent consolidation, the potential for spikes in volatility has returned. This is why the lower 88.6% retracement is noted, as it seems far away now but could quickly come into view if downside momentum accelerates. This is not a prediction, just an observation. As with the breakdown that opened this analysis, price action remains the deciding factor – and it will lead the way.
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