Natural Gas Technical Analysis and Near-Term Outlook
Natural gas settled below crucial support around $2.72 for the third straight day. Odds continue to favor a larger decline and a test of the next major objective at $2.51. Falling below $2.68 will call for $2.63, which then connects to $2.51.
Nevertheless, Tuesday’s long-legged doji and Wednesday’s inverted hammer suggest a larger test of resistance might take place before taking out $2.63. Today’s initial move up held Monday’s $2.78 midpoint, but a close above this will complete the long-legged doji and inverted hammer. This would then call for a test of $2.82 and possibly $2.87. The $2.87 level is key for the near-term because this is the confirmation point for the long-legged doji and inverted hammer and is in line with the bottom of Monday’s gap down from $2.949. Settling above $2.87 is doubtful but would reflect a bullish shift in external factors and sentiment.
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