At this moment, further downside is still expected in natural gas. Break of 3.758 will confirm down trend resumption for 61.8% projection of 6.24 to 4.28 from 4.88 at 3.67 next. On the upside, above 4.04 will flip intraday bias back to the upside and suggest that another recovery is underway for 4.38 resistance. Still, upside is expected to be limited below 4.38 resistance to retain the bearish outlook. However, note that a break of 4.38 resistance will be the first signal that Natural gas has bottomed out in short term and will bring stronger rally to 4.88 resistance next.
In the bigger picture, staying well below 55 days EMA at 4.598, Natural Gas' down trend from 13.69 is still in progress. Sustained trading below 4.0 should now pave the way to next key psychological support at 3.0. Also, such decline is treated as part of the sideway pattern from 15.56 and could be heading to 100% projection of 15.65 to 4.3 from 13.69 at 2.34.
On the upside, break of 4.88 resistance will be the first signal that such down trend is bottoming, possibly with bullish convergence condition in daily MACD. Stronger rebound should then be seen to 6.24 resistance for confirming completion of medium term down trend.
Nymex Natural Gas Continuous Contract 4 Hours Chart
Nymex Natural Gas Continuous Contract Daily Chart