The bulls are making plans

Summary

• Natural Gas breaking above 3.064 may send bullish signal
• Four potential targets identified
• If 2.502 support is broken, bullish scenario becomes invalid
• Rising tops and bottoms should keep Natural Gas bulls in play.

The bulls in Natural Gas (NatGas) commodity on the D1 time frame are making plans to take over the reins from the bears.

The first signs of this scenario started when the bulls made a higher bottom on 2 August at 2.502 and the price proceeded to break through weekly resistance level.

This was further confirmed when a higher top was formed, the Momentum Oscillator broke through the 100-base line into bullish terrain and the MACD, just touching the zero baseline, started gaining upward momentum.

The bears are currently retesting the weekly resistance turned support level in an attempt to thwart the bull’s plans.

If the bulls break through the last higher top that formed on 9 August at 3.064, then four targets become possible from there. Attaching a modified Fibonacci tool to the higher top at 3.064 and dragging it to the lower bottom at 2.502, the following targets can be determined:

• The first target is possible at 3.289 (Target 1) and this is located just before a weekly resistance level to enable good risk management in case the price cannot break though that level.
• The second price target is likely at 3.401 (Target 2) if the bulls manage to break through the weekly resistance level at 3.391.
• The third and fourth targets (Target 3 & 4) are possible if the bulls maintain their momentum.

If the support level at 2.502 is broken, this scenario is no longer valid.

As long as bulls can keep the upper hand with the demand overcoming supply, the market sentiment for NatGas on the D1 time frame will remain bullish.