Natural gas prices end 7-week losing streak, up 4.32%; daily chart shows downward momentum is slowing; multiple dojis in candlesticks show price indecision
Weekly natural gas price chart – 7-week losing streak ends
Natural gas prices managed to close higher last week, although overall they are still quite weak. Prices rose 4.32% last week, but that achievement pales in comparison to the ongoing price declines since the second half of last year. However, it did mean natural gas was spared its eighth straight weekly decline, finally ending its longest stretch of losses since October.
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The price failed to break below the March 2021 low of 2.422 for 2 consecutive weeks. However, despite strengthening support, the weekly chart shows no sign of a reversal, and the bearish trajectory signaled by the bearish head and shoulders pattern formed from last year remains in focus. If the price reaches the target level of the pattern, it will likely test the 2020 low, which is the 1.44-1.61 range.How Head and Shoulders Tops and Bottoms Can Predict Price Movement
Natural Gas Daily Chart – Multiple Dojis near Support
Looking at the daily chart, since the price reached the 100% Fibonacci extension level of 2.326, multiple dojis were recorded on the candlestick chart. This reinforces the signal of price indecision, which sometimes means a trend reversal may be brewing. The bottom divergence of the RSI indicator also shows that the downward momentum is slowing down.
If natural gas reverses upward in the future, the top will focus on the 20-day moving average. Here again may act as resistance to push the price back down. Conversely, a confirmed close above this level could open the door for a larger reversal. The upper target looks at the December 2021 low of 3.536, which may become a new resistance level.
On the other hand, an extension of the decline would bring the focus back to the downside, possibly towards the 114.6% Fibonacci extension level of 1.555 to the 2020 low.
(Written by Daniel Dubrovsky, translated by Leona)
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