Positive Week in Review Setup
If prices decisively rebound over this week’s high of 2.66, a positive reversal will occur. Consequently, natural gas starts to have a serious opportunity to go upward once it surpasses the two-week high of 2.78.
At that time, it should also be above the 12-Day EMA trend indicator, which is another indication of strength. And a few weeks ago, it was used as a point of resistance but rejected, continuing the negative trend.
Initial Important Upside Target
The initial target zone of relevance would be in the range of 3.45 to 3.60 if the two-week high is exceeded to the upside. The 23.2% Fibonacci retracement, as well as a previous weekly high and low, are all included in that area.
Negative Potential
Instead of breaking up from the inside week like in the bullish scenario above, natural gas might either break higher and then drop down into the consolidation area, finally falling to a new trend low. The completion of a significant measured move at 2.33 would be the next price objective if the trend low to date of 2.34 is broken to the negative. The price decline of the second leg down (2) will mirror that of the first leg down at 2.33. (1).