March natural gas finally settled above February’s 9’s $2.64 midpoint. The move up is most likely corrective of the decline from $3.259 and will continue to be a grind. However, natural gas should now challenge at least $2.71 and possibly higher before the decline ultimately continues.
The wave $2.53 – 2.662 – 2.565 met its $2.65 smaller than (0.618) target today. Waves that meet the smaller than target typically extend to the equal to (1.00) target, in this case, $2.71. This is an important objective because $2.71 is also in line with February 9’s open and is the completion point of the weekly morning star setup.
Settling above $2.71 would call for a larger upward correction and test of key near-term resistance at $2.81. This is the 38 percent retracement of the decline from $3.259 and the 50-day moving average. For the move down to continue in the near-term $2.81 must hold. A sustained close above this would not doom the move down, but rather dampen the odds for a continued decline to targets below the continuation chart’s crucial $2.522 swing low over the next few weeks.
Initial support is $2.61 and key support for the next few days is the $2.565 swing low. A move below this would wipe out the aforementioned wave up from $2.53 that projects to $2.71 and higher. This would also shift near-term odds back in favor of testing $2.51 and lower.
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