Trade in the natural gas market over the past 2 days as well as in the overnight session appears like a second and final seasonal low for 2014 has been posted.
The December 14 contract fell down to a new contract low of 3.620 on Tuesday but has been rallying sharply higher ever since. The contract broke out above the 10 day moving average for the first time during the month of October on Wednesday which held as support at Thursday’s low.
Buying has continued in the overnight session rallying the market higher in today’s early trade. The next upside resistance now becomes the 40 day moving average at the 3.960 level today. A breakout above this average would turn the longer term trend back higher.
The 10 day moving average at 3.760 will remains primary support in upcoming trade. As long as the December contract trades above this average, the near term trend will remain up.
Technical Indicators: Moving Average Alignment – Neutral-Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index – Bullish
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