Key Reversal Week in Natural Gas

The Commodity Trader’s view - During the relentless downmove in Natural Gas prices there have been one or two false dawns for bulls. However, the light at the end of the tunnel may finally have been reached, with technical reasons for expecting a rebound becoming compelling.

• WEEKLY CHART – MAY-09: For the last few weeks in the Commodity Trading Guide we have been pointing out the positive weekly RSI divergence, which hints at bear fatigue. And last week we saw a Key Reversal Week which may be setting the chart up for a decent rebound. We have marked in the appropriate retracement levels of the major fall.
• DAILY CHART – MAY-09: There have already been one or two minor positive signs on the Daily chart. (Note the positive divergence on the daily RSI) We now want to see a close above the bear channel top projection AND the nearby 4.461 05-Mar high to trigger us bullish. We would first target towards the 5.650 23.6% level. Ideally, after an up-break, support for any dips will come in at/above the 4.101 12-Mar high (although, in the end, that Key Reversal Week wouldn’t be negated until a drop below the 3.743 low).

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