Natural Gas Finds Support, But What Recovery?

The Commodity Specialist view - This year there have been two legs in the downtrend in Natural Gas, and finally interesting dual support has been reached. This has prompted a s/term recovery, but further signals are required in order to inspire bulls.

• NATURAL GAS – WEEKLY CONTINUATION CHART: A typical 3-wave downmove has been seen so far this year. Note how dual support has been tested (3.155 May-09 low and 76.4% pullback), perhaps not surprisingly triggering a rebound phase.
• NATURAL GAS - DAILY CHART DEC-10: Recent support came, not surprisingly, from around the bear channel base, close to support from the Weekly chart. Initial resistance is from the Sep congestion below 4.500, which includes a 38.2% rebound level. However, more important is the (redrawn) bear channel top at 4.650 – a break through this would imply that overall downward momentum had slackened, with a better recovery underway, s/term dips notwithstanding.

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