Technical outlook:
Natural Gas surpassed the 6.50 levels during the Asian session on Tuesday after testing the 6.06 lows intraday on Monday. The commodity is moving in line with projections of a potential rally towards 8.3 in the near term. Also, note that prices are plotting a Morning Star candlestick pattern that might indicate a possible short-term change in trend.
Natural Gas has been rallying since June 2020 after printing lows at around 1.52 (not seen on the daily chart view presented here). The entire rally between 1.52 and 9.65 looks complete as the Fibonacci targets were achieved above 9.55 as projected. If the above larger degree structure holds well, prices should ideally produce a corrective drop towards the 4.63 mark.
Natural Gas is already progressing towards 4.63 and has completed its first leg lower towards 6.06 on Monday. Prices are now expected to produce a corrective rally towards 8.3 in the next few trading sessions before reversing lower again. Also, note the Fibonacci convergence at 4.63, which indicates a high probability of a bullish bounce.
Trading plan:
Potential drop through 4.63 against 9.65
Good luck!
