Will Watch Price Action for Clues Once Target Zone Reached
We will be watching natural gas closely to see how it behaves within that range. If there are additional signs of improving upward momentum, then there is a chance that natural gas keeps going past the first target zone. Although the first target zone is formidable given the degree of confirmation identifying that zone as potential resistance, buyers could be drawn back in as volatility expands.
Higher Target Zone Possible
The second and higher price zone covers approximately 2.97 to 3.02. Of significance is the completion of a measured move that happens at 3.00. The first move was a 53.9% seven day advance up off the first low of the downtrend at 1.97 (1). Since symmetry or similarity between swings occurs in financial markets, we would anticipate a possible match with the current larger rally, which began from the ultimate trend low of 1.95 (2). Also, the second move can always exceed the first as well.
Other Bullish Indications
In addition to the new trend high today, there was first a successful test of the internal uptrend line as support. Price reversed higher off support of the line. Today’s low was 2.52. This behavior is an additional sign of strength, as first support of the developing uptrend was confirmed. Then, a decisive rally followed.
This also means that a drop below the trendline may be the first sign of weakness and an indication that upward momentum is slowing. A daily close below today’s low of 2.52 would then be needed to confirm weakness.
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