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Wednesday, March 13, 2024 4:36:16 PM
By: Bruce Powers | March 13, 2024
• Natural gas prices retreat further from recent highs, indicating that sellers remain in chart. Key support levels at 1.63 and 1.58 should hold if it is to have a chance to rally.
Natural gas continued to pull back on Wednesday from the recent 2.01 swing high hit last week. Today’s decline put it below yesterday’s low and at a new retracement low of 1.65. It looks to be on its way to the 78.6% Fibonacci retracement at 1.63, while the previous pullback low is at 1.58.
![](http://responsive.fxempire.com/v7/_fxempire_/2024/03/a-screen-shot-of-a-graph-description-automaticall-8.png?func=crop&q=70)
Long-term Downtrend Dominates
The long-term pattern in natural gas is a downtrend. Last week’s high found resistance at previous support, which is typical price action in a bearish environment. Further weakness is seen this week as both the 20-Day MA and 61.8% Fibonacci level failed to stop the decline. Further, a bearish signal occurred on a drop below last week’s low of 1.755. If support is seen around the 78.6% retracement followed by a bullish reversal, a rally may follow to test last week’s highs and possibly exceed them. The trend low was at 1.52 and it was in a price zone where long-term support was seen in the past.
Sitting at Long-term Support Range from 1.64 to 1.44
Specifically, support was seen in 2016 and then again in 2020. In 2020 the price of natural gas hovered around a price range from 1.64 to 1.44 for about six months. During the recent decline the lower prices of the range were not reached but they may still be. The next indication that the price of natural gas is getting weaker would occur on a drop below the weekly low of 1.59 and then the daily minor swing low at 1.58.
Bullish Reversal off Support Could Lead to Another Rally
If support is seen above the weekly low, followed by a bullish reversal, natural gas may rally again to test resistance levels. Initially, a test of the lower line of the declining blue dashed parallel trend channel is anticipated. That could lead to another lower swing high. That lower line has been recognized by the market several times starting with the December 13 swing low. Although it will likely be resistance again a decisive breakout above the line could lead to an eventual advance above the 2.01 swing high and further up into the channel.
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Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Caveat emptor!
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