Resistance Cluster Forms Near Prior Breakdown Zone
The first resistance zone after the wedge breakout was at $2.88, which is now a lower swing high. That was right at the falling 50-day moving average, now at $2.86. It completed the third test of resistance near the 50-day line since it was broken in late January. The potential demand suggested by the wedge breakout, along with the reclaim of the 20-day moving average, puts natural gas in a position to reclaim the 50-day average and further confirm strength, if follow-through buying continues above near-term resistance.
Higher Resistance Levels Define Upside Path
A decisive rally above $2.88 will signal a continuation higher, as the 50-day average will also be reclaimed by then. Key resistance looks to be from a zone around the 78.6% Fibonacci retracement of the prior decline at $3.28. Soon, the falling 100-day moving average at $3.31will cross below the Fibonacci zone and mark a lower potential resistance zone.
However, key dynamic resistance is marked by the falling 200-day moving average, now at $3.41. It was successfully tested as resistance during the prior advance in March and is expected to represent resistance again, maintaining its role as the upper boundary for the broader trend structure unless a breakout emerges.