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Natural gas's decline continued last week as expected and breaches 3.3 level, just inches above mentioned target of 61.8% projection of 5.007 to 3.61 from 4.144 at 3.281. Short term outlook will remain bearish as long as 3.613 resistance holds. Sustained trading below 3.3 will target next projection level of 100% projection of 6.108 to 3.81 from 5.194 at 2.896. On the upside, above 3.613 will indicate that a short term bottom is formed and bring stronger rebound towards 4.144 resistance instead.
In the bigger picture, whole decline from 6.108 is still in progress and further fall should be seen to 100% projection of 6.108 to 3.81 from 5.194 at 2.896 next. More importantly, recent development revived the case that medium term rebound from 2.409 is completed at 6.108 already. Also, fall from 6.108 might indeed be resuming the long term down trend for a new low below 2.409. We'll pay attention to the structure of the current decline for more hints. On the upside, break of 4.144 resistance will be the first signal of reversal. Further break of 5.007/194 resistance zone will in turn argue that fall from 6.108 has finished.
In the longer term picture, while the bounce from 2.409 was strong, it's been limited below 55 months EMA (now at 5.814) and reversed. The failure to sustain above 55 weeks EMA (now at 4.435) also argue that 2.409 might not be the bottom yet. We'll stay bearish as long as this year's high of 6.108 holds and favor a new low below 2.409 going forward.
Nymex Natural Gas Continuous Contract 4 Hours Chart
Nymex Natural Gas Continuous Contract Daily Chart
Nymex Natural Gas Continuous Contract Weekly Chart
Nymex Natural Gas Continuous Contract Monthly Chart
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