Two weeks ago, I wrote an article about how natural gas was testing the low of a several-month balance of 2640 to 3013. Additionally, at that time natural gas had formed a relatively tight five-day balance of 2642 to 2735 at the bottom of that larger balance range. Over the last two weeks, natural gas has remained within that same tight 2633-to-2735 range. When a volatile market such as natural gas remains within such a tight range for an extended period of time, a significant move usually follows.
If the market gains acceptance above the 2735 three-week balance, it may begin a rotation back up to the 3013 high of the larger balance range, with the 2816 to 2819 gap as the first target. If the market gains acceptance below the 2633 three-week balance low, 2566 and 2475 are the next downside references on the weekly and monthly charts.
