A drop below 2,307 would be a bearish weekly and daily signal.
The drop of 2,307 this week was Price Level It makes some sense. It is the low of the week, so a break below it would indicate a continuation of the bear market on the weekly timeframe. Patterns on higher timeframes tend to influence patterns on lower timeframes. This is the fractal nature of financial markets. Therefore, higher timeframes may take precedence over traders’ timeframes.
Daily Bear Flag
A break below 2,307 on the weekly chart can be seen on the daily chart as a drop below the short ascending trend line crossing the support of the recent daily low. On the daily timeframe, the price action over the past two weeks has taken the form of a small bearish flag. Therefore, a break below last week’s low is a bearish signal on both the daily and weekly timeframes. Note also that the week is expected to end with a bearish shooting star candlestick pattern. Although it is not occurring at the top of a trend, it does indicate signs of short-term bearish sentiment.
Bulls need to rise above 2,370
Aside from the breakout above today’s high of 2,370, there are still few bullish signs on the charts. The first breakout attempt has already shown weakness, so the consolidation phase is likely to continue before any follow-through occurs, either upwards or downwards. That said, if natural gas breaks out above this week’s high of 2,369 next week, prices could continue to accelerate towards the recent high of 2,450.
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