Oil & Gas - Energy - Commodities - Resources (OILBRENT)

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Natural Gas Advance Stalls at Key Resistance Zone
By: Bruce Powers | March 5, 2024

• Natural gas continues its uptrend with higher lows and highs, but weak closes signal resistance at 2.00 and potential for further gains if it exceeds 2.01.

Natural gas is set to complete another day with a higher low and higher high as the uptrend progresses. At the same time, the close on Wednesday following a new trend high was weak, in the lower half of the day’s trading range. A similar situation may be developing today, Tuesday, as a new trend high was hit. But the closing price is setting up to be weak, in the lower half of the session’s price range. Resistance was seen off the day’s high of 2.00.



Previous Trend Lows and Downtrend Line Mark Resistance Zone

Today’s price action highlights a key near-term price zone of interest as two lines of some significance are marking the current resistance zone. There are two horizontal lines representing the previous trend lows from a year ago from 1.95 to 1.97. And the long-term downtrend line that begins from the August 2022 peak marks a similar price zone. Notice that on each of the past two days the closing price was below resistance represented by the trend line. So, the next positive sign for the bulls is a close above the trendline.

Rise Above 2.04 Needed for Indication Natural Gas May Keep Rising

The new trend high is 2.01, just shy of the next higher likely resistance zone from 2.02 to 2.04. If the 2.04 high is exceeded and price keeps rising, and then closes above the downtrend line, higher targets become more likely to be reached. Notice the declining blue dotted parallel trend channel on the chart. It currently represents potential resistance, and it is going through the next resistance zone starting from 2.02 and therefore identifying a similar price zone. Two Fibonacci levels identify the zone, starting with the completion of a rising ABCD pattern extended by the 161.8% Fibonacci ratio at 2.02. The 38.2% Fibonacci retracement level is at 2.04.

Keeping the weekly chart in mind. A bullish reversal was triggered last week, and this is the second week where the price of natural gas rose above the prior week’s high. It wouldn’t be surprising to see at least three weeks up before the rally runs out of steam, or an inside week rest before continuing higher.

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