Support Holds, but Risks Persist
The 50-day average’s defense is a bullish signal, yet downside risks linger. Natural gas is caught in a short-term rising trend channel, contrasting with a broader declining channel. Recent highs stalled near the 200-day moving average at $3.38, aligning with the top of the falling channel, where resistance triggered a double top bearish reversal last Thursday. The rejection also coincided with the upper boundary of the rising channel, extended by 25%. A reversal from this level typically targets the channel’s lower boundary, a scenario still in play if today’s support falters.
Critical Support Zone at $2.95
Should the $3.03 low give way, a deeper support zone at $2.95 emerges as a key target. This level, projected for October 21, marks the intersection of the rising channel’s lower line and the falling quarter channel line of the larger bearish trend. Reinforcing its significance, a gap fill at $2.95 aligns with an anchored Volume Weighted Average Price (VWAP) at $2.98, rooted in the February 2024 lows. This convergence of technical markers makes $2.95 a high-probability floor if selling resumes.
Outlook and Key Levels
Today’s rally suggests buyers are defending $3.03, but the broader bearish channel keeps pressure on. A close above $3.09 strengthens the bullish case, while a break below $3.03 targets $2.95. Monitor today’s close for confirmation of support or renewed weakness—$3.38 resistance remains a hurdle for any sustained recovery.
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