Natural Gas Breaks $2.74 Floor as Bearish Structure Deepens

By early this year, natural gas had already broken below its rising trendline and the 200-day moving average. Those indicators had defined dynamic support during the advance from the 2024 low. The recent lower high at $3.42 completed the first notable pullback to test them as resistance, confirming the shift in trend.

Tuesday's price action strengthens that bearish read. The failure at $2.74, a level that had offered support on two prior tests in June, suggests sellers are regaining control. The next major downside target beyond $2.58 is the 78.6% Fibonacci retracement of the entire advance from the 2024 low.

Bruce, a seasoned finance MBA and CMT charter holder who previously served as head of trading strategy at hedge funds, said the nested downtrend structure means each lower high reinforces the broader bearish case. "The lower swing high at $3.42 completed the first notable pullback to test those indicators as areas of resistance instead of support," he said. "Once that process completes, the bearish trend could be signaling it may be ready to proceed."

For context, the weekly COT data shows speculative shorts have been building since the $4.09 peak, a positioning pattern that often precedes sharp directional moves when key support levels break.