Sluggish price action in the natural gas market so far this week is beginning to look like a failed rally attempt. After setting decade-low prices in last week's dismal performance, natural gas futures are grinding higher inside a very shallow Channel Up chart pattern. Autochartist is tracking this pattern as it watched for definitive breakouts.

In fact, this is the lowest price natural gas has traded since it shot out from the doldrums in 2001. The price accelerated rapidly from the $1.80 per million BTU price level to briefly exceed the $20 level in the nearby futures. The resulting price collapse appears to be coming to a completion right here where it all began.

Friday's trading and weak settlement in natural gas opens the door for continued weakness fro the current level. The price settled exactly on top of the rising channel trend line support, providing for a buy signal with a tight stop-loss order. A reversal order might also work out well here, as a trade below trend line support would suggest a new low beneath $2.00 per million BTU is likely. If the channel up chart pattern does continue to provide upside guidance for the market, the next viable signal for swing traders would be exiting long positions at the next retest of channel resistance near $2.31 per million BTU. Traders anticipating renewed weakness may enter short positions only if the market breaches $2.25 per million BTU.

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