Natural gas prices rose to $4.554 on Wednesday holding near term resistance at $4.56. The subsequent move down has been choppy and held the 50% retracement of the move up from $4.322 and the midpoint of Tuesday's candlestick. The mix of positive and negative factors reflects the market's indecisiveness, but overall the positive factors marginally outweigh the negative.
The move up should continue to test $4.56 again, above which next resistance is $4.63. Another oscillation within the corrective bullish formation to test support is allowable, but $4.41 should hold. Should the corrective formation fail to break higher and prices fall below $4.41 in early trading, look for $4.35 and then $4.24.
The $4.56 target is the 62% retracement of the move down from $4.707 to $4.322. The $4.554 swing high held just below this and $4.56 will need to be overcome soon to confirm the next leg higher is going to continue within the next few days.
NGG11 Retracements to $4.322
The decline to $4.446 on Wednesday held the 50% retracement from $4.322 to $4.554. However, key support that must hold for the move up to continue right away is $4.41, the 62% retracement. A close below this would open the way for $4.35, the 89% retracement, and more likely a test of major support at $4.24.
NGG11 Retracements to $4.554
Intraday Moving Average Table
The moving averages confirm resistance at $4.54 and support at $4.35. The most important of these are the 5-day (weekly) moving average, which is $4.54 and the 21-day (monthly) moving average, which is $4.35.
NGG11 Moving Averages
The midpoint of Tuesday's candlestick held, and prices closed higher on the day, which was positive. Today's star may be an evening star setup, but is not textbook because it formed during an overall down move from $4.707, rather than an up move, so the likelihood of follow through to the downside is dampened.
NGG11 Daily Candlesticks
Review of Momentum Status
Bullish divergences that completed at the $4.322 low preceded the move up to $4.554 over the past two days. Momentum still looks positive and there are no indications that a major turn to the downside is going to take place.
NGG11 Intraday Momentum
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