Natural Gas futures slipped further into bear market territory on Friday after a breach of key horizontal support brought on another spate of selling. The key level identified by the Autochartist platform shows the selloff began after the market failed to hold the $3.68 per million BTU level.
The steep drop from the key level confirmed the weakness indicated in the longer term Channel Down chart pattern identified on the 240-minute time interval. The rapid rate of decline suggests this move may overshoot the lower trend line support created by the channel. If this occurs it will set new contract lows for the nearby Natural Gas futures, and will also trigger a technical breakout on the chart.
Friday's close left the price sitting at the support near $3.52 per million BTU level. To avoid a downside breakout, Monday's trading session will need to remain in a flat to higher range. A successful turn-around from here would poise the market for a return to the key level at $3.68, which also now coincides with the top of the Channel Up pattern illustrated here. This would also be a point to watch for further developments in the pattern.
For further information on this and other Autochartist products, visit our website at www.autochartist.com