Natural gas has recovered sharply from a 2.616 low and now trades at 3.035, just below 61.8% Fibonacci resistance at 3.059. Investing.com's technical analysis flags a possible bull trap, while momentum indicators still lean bullish.
Natural gas rebounded sharply from a low of 2.616 in a V-shaped recovery, and the price now sits above the 200 SMA at 3.001. Investing.com's analysis shows the price at 3.035 after a bullish Marubozu candle at 3.052 on Oct 26, which it reads as strong buying pressure.
However, the analysis names a bull trap as the primary risk as price approaches the 61.8% Fibonacci retracement at 3.059 and upper Bollinger Band resistance.
Bulls and bears point to different signals
Bulls have indicators on their side. The MACD reads 0.0101 against -0.0346, a bullish momentum crossover, according to the analysis. Separately, the SuperTrend at 2.836 has flipped to bullish support, and volume is expanding.
Bears, by contrast, cite the upper Bollinger Band at 3.129 and a previous breakdown supply zone at 3.13-3.15. The analysis sets invalidation levels at 2.84 for bulls and 3.15 for bears.
Scenarios hinge on 3.06
The bull scenario lists an aggressive entry at USD 3.06 on a 5h close above the 61.8% Fib, with a first target of USD 3.15. The bear scenario also uses USD 3.06 as an entry, on a rejection at the same level, and targets USD 2.98 first.
The analysis rates the current stance neutral between 3.00 and 3.10, calling that range a no-trade zone with high chop risk.
Source: Investing.com
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