Natural Gas Rally Strengthens: Potential for Further Upside

To record another higher daily low and higher daily high, natural gas continues to advance. Given that the high for today is 2.683, it is directly bumping up against resistance from the most recent swing high at 2.685. Additionally, today's gain indicated a breach of the 2.65 high set last week. If it can also close above that high, it will be an even more bullish sign. The fact that last week's weekly close was the highest since late-February is also encouraging. A move above the most recent swing high, which is 2.685, will also result in a monthly breakthrough.

Chance of Entering Next Target Zone Start Increasing from 2.77

In the ascending parallel trend channel from 2.77 to 2.83, towards the top, natural gas is on track to hit its first target zone. Due to the intersection of numerous indications, that area becomes more important. One is the 100-Day EMA. The current value is 2.79. Since December of last year, natural gas prices have mainly remained below the line.

Beginning of the 100-Day EMA Might Display Resistance Symptoms

The line's resistance would be tested for the first time since then during this rally. Price will often be rejected after it first approaches a long-term moving average, like the 100-Day or 200-Day, after being away from the lines. In this instance, it would imply that there is a strong likelihood that the 100-Day line will serve as a point of resistance for this rally. The rise may yet continue into the next higher target zone if a clear daily close above the 100-Day EMA or the top of the resistance zone at 2.83 is achieved.

Higher Target Zone 

The higher target zone is between 2.97 and 3.03 in size. The previous resistance top from early March, at 3.03, serves as its anchor. In addition to multiple Fibonacci levels, this price zone marks the end of a significant measured advance that began with the swing low in April (2). If it succeeds, it will demonstrate symmetry between swings, where the percentage advance off the initial trend low in February equals the distance from the low in April. At three, there is a game.