A quick look at today's price action in the natural gas market looking at the weekly continuation chart above and the 10 minute chart for the October 14 contract to the bottom left. I can't get these two charts to align. Anyway, the weekly chart shows the long term trend line support that was broken in mid-July near the 4.000 level. The market bottomed at a 3.724 low before rebounding back higher.
The October contract spiked higher today following release of the weekly storage report which came in a few Bcf lower than estimates. The spike lifted the spot October 14 contract to a 4.101 intraday high holding below former trend line support as resistance. This was a very important retest of former support as resistance.
The ensuing sell off from the 4.101 intraday high dropped the October contract to a 3.973 low before stabilizing and moving back higher to the current 4.055 level.
The sell off today following the spike up to 4.100 trend line resistance shows how important this resistance is for the market.
A close back above 4.100 basis the October 14 contract should be further indication the natural gas market has bottomed.
If October contract fails to clear 4.100 resistance, the market should tip back lower possibly retesting weekly chart support between 3.724-3.727. The outcome should be known over the next few days of trade.
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