Today should be a key technical test for the natural gas market which has been holding above long term support over the past two sessions.
The long term support levels are two lows the first being the 3.541 spot contract low set last October. And the second level of support being the 3.585 weekly low set on Monday.
The January contract has moved higher off this support over the past two days with short-covering ahead of today’s EIA weekly storage report helping to support the market. The January contract settled Wednesday’s session at 3.706, up .054 for the day.
The market test on underlying strength will likely come today following release of the weekly EIA storage report at 9:30 am central. The 10 day moving average at 3.790 today extending up to 3.820 will be primary resistance. A breakout and close above this level could indicate a near term low has been set.
If today’s early strength fades and the market turns back lower, 3.541-3.585 will remain primary support. A drop under 3.541 will keep the trend bearish turning the late-2013 weekly lows at 3.380-3.400 into the next downside support.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
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