Natural gas prices start the week with more pain, eyes on a Doji
Natural gas prices extend losses on Monday; another Doji emerged on the daily chart, watch for follow-through and four-hour chart shows natural gas idling above lows from 2021.
Another Doji
Natural gas prices are off to another shaky start this week. The commodity has declined for six consecutive weeks and is setting up for a seventh drop. A closer look reveals that the past twio months have been the worst performance for natural gas since 2008!
Prices continue aiming lower in the aftermath of a bearish Head & Shoulders chart pattern.
On the daily chart, prices left behind a Doji candlestick pattern. While this is a sign of indecision, it does not necessarily mean that a reversal is brewing. On Friday, natural gas left behind an identical candlestick and continued lower the next trading day. It is important to watch for follow-through after signs of indecision emerge.
A daily push higher after the Doji could increasingly open the door to a turn higher. Still, that would place the focus on the 20-day Simple Moving Average (SMA). It could hold as resistance, maintaining the downside focus. Further losses place the focus on the 100% Fibonacci extension level at 2.326.
Let us zoom in a little to see what the near term could look like.
Daily chart
Watch the 2021 lows
On the four-hour chart, natural gas is quickly approaching 2021 lows. This is a narrow range between 2.422 and 2.453. Prices are struggling to extend losses below the 38.2% Fibonacci extension at 2.759. Like the daily chart, the 50- and 100-period SMAs remain pointing lower.
As such, these may maintain the downside focus in the event of a short-term upside reversal. Breaking above the 100-period SMA places the focus on the January 9th high at 4.128. Otherwise, breaking under 2021 lows exposes the 61.8% Fibonacci extension at 1.912.
Four-hour chart
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