Natural Gas Technical Analysis and Near-Term Outlook
January natural gas fulfilled the $2.99 objective as called for at today’s $3.002 high. This objective held on a closing basis as expected and a test of support is underway. However, the decline from $3.002 will likely prove to be a short-lived correction of the move up from $2.656. This is because the newly formed primary wave up from $2.656 met its smaller than (0.618) target at $3.002. Therefore, this wave now favors a move to fulfill its $3.09 equal to (1.00) target, which is in line with the 50 percent retracement of the decline from $3.507. Settling above $3.09 will call for a test of key resistance and the decision point for a renewed bullish outlook around $3.19.
The decline from $3.002 has already retraced 21 percent of the move up from $2.656. There is a good chance for natural gas to fall to $2.87, the 38 percent retracement, before the move up continues. Support at $2.87 is expected to hold. Closing below this will call for key near-term support at $2.79. Settling below $2.79 would shift odds back in favor of challenging major support at $2.66 again.
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