Natural gas has staged an impressive rally after falling from its one-year high. Now, it is back at the level of its one year high and is facing resistance at the $3.30 - $3.40 level.
The market is having a tough time breaking through that resistance, as evidenced by the minimal price change yesterday. RSI is also signalling a retracement to previous support levels soon.
If prices fail to breakout above $3.40 we can expect the next level of resistance to be the 50 day MA which is currently at $3.00. If prices fail to rebound off the 50 day MA we can expect a retracement back to around $2.70. This price level is likely to serve as a support level as it is the level of a previous structure high and the end of a trend line.
A breakout on the upside though, could provide an extra boost to this short term rally we are seeing right now.