The natural gas market last week broke out to the downside from a 12-week sideways range. This should be the final price break before a seasonal low in the market is set.
The spot November 14 contract last week was finally able to break under 3.786 weekly low support settling Friday at 3.766. Losses for the week came in at .093 or 2.4% for the November contract.
The trend remains down with the 3.658 contract low posted last November being the next area of support. Longer term support is between 3.450-3.500.
Former support between 3.786 extended up to the lower-3.800 level now becomes resistance. A close back above the lower-3.800 level should be a signal the market has bottomed. A close back over 4.150-4.200 resistance is needed to turn the longer term trend back higher.
The Commitment of Trader’s report released on Friday showed funds long 162,279 contracts, down 1,898 from the previous week. Funds continue to hold on as the market sinks to new 2014 price lows.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bearish
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