RSI Hints at Pullback After Natural Gas Hits Multi-Year High
Natural Gas has torn higher, adding nearly 4.5% this week to an already monstrous rally. Prices are on track to record a sixth monthly gain if this pace continues.
On a technical basis, a pullback may be necessary before moving higher, however. The recent surge has brought prices well above an ascending trendline that has guided prices higher since the May swing low.
The Relative Strength Index (RSI) is moving lower within overbought territory. That suggests upward momentum overheated and may be attempting to cool off. The 161.8% Fib extension from the August high/low may provide support after serving as resistance earlier this week. A pullback to trendline support is also in the cards, with directional bias remaining bullish above that level.
On a technical basis, a pullback may be necessary before moving higher, however. The recent surge has brought prices well above an ascending trendline that has guided prices higher since the May swing low.
The Relative Strength Index (RSI) is moving lower within overbought territory. That suggests upward momentum overheated and may be attempting to cool off. The 161.8% Fib extension from the August high/low may provide support after serving as resistance earlier this week. A pullback to trendline support is also in the cards, with directional bias remaining bullish above that level.