Short Term Natural Gas Bulls Up Against Resistance

Price swings in Natural Gas have so far avoided giving a clear directional signal in 2011. Latest strength has brought the market to key resistance, and a breach would provide an initial green light to the bulls.

• WEEKLY CHART -CONTINUATION Price swings in 2011 have had an upward bias, but no clear break to the upside. If better recovery off the dual support (from near the 3.155 May-09 low and 76.4% pullback) is seen then note possible resistance from the 76.4% 5.425 retracement. Further out we would target the 38.2% recovery level at 6.720 plus equality target just above at 6.910.
• DAILY CHART –Jul-11: In the Commodity Specialist Guide we were recently looking at support from the 4.154/4.141 area (former 76.4% pullback and 11-Apr low). This worked nicely and the recovery has now put resistance from the channel top projection under scrutiny (at 4.870 currently). A break through this channel would be bullish, initial focus turning to a Fibo projection at 5.220, ahead of levels on the weekly continuation chart.

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