The September 14 natural gas contract now enters into a 5th week of sideways, range bound trade alternating between support at the lower-3.700 area and resistance at the lower-4.000 level.
The September contract did gain .064 (1.7%) in last week’s trade settling Friday at 3.840.
On last Monday, the September contract fell to a 3.727 low holding 2 ticks above the current low for 2014 of 3.725 set in July. The inability to break below previous low support was a bullish signal.
A rally back higher from the Monday low topped out at a 3.955 high on Thursday with the market pulling back from the weekly high in Friday’s session.
A breakout from the 1-month trade range is needed to determine the next move for the market. An upside breakout above lower-4.000 resistance would turn the longer term trend back higher. It would also likely indicate the final seasonal low for 2014 has been posted.
If the breakout instead comes below 3.725-3.727 support, the primary trend will remain down with 3.650 and the 3.582 contract low being the next downside support.
Once a final low is posted, a seasonal rally back higher into the early months of 2015 is expected.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
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