Outside of a brief two day rally in mid-January, the February 15 natural gas contract has been trading for the most part between 2.750-2.760 support and the 2.980-3.020 level as resistance during 2015.
The February 15 contract which expires on tomorrow’s close pulled back from upper resistance reached on Friday in yesterday’s trade closing the session at 2.881, down .105 (3.5%).
The market has since reversed back higher in today’s early trade rallying up to a 2.991 early morning high. A breakout above 2.980-3.020 would turn the near term trend back up with 3.180-3.210 becoming the next upside resistance. Longer term resistance is the 40 day moving average at 3.300 followed closely behind by the mid-January 3.352 high.
2.750-2.760 weekly low support has held throughout the month of January. The longer amount of time a market holds above support, the more important the support level becomes. A drop under 2.750 is needed to keep the primary market trend bearish. If this occurs, the 2.575 weekly low from August 2012 will become the next downside price target.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bullish
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