The natural gas market last week fell to a new 2-year low closing lower for a 10th week out of the past 11. The front month March 15 natural gas contract lost .112 (4.1%) during last week’s trade settling Friday at 2.579.
The March contract dropped to a new contract and 2015 spot low at 2.574 in Friday’s trade holding above a key support level near the daily low. This support at 2.575 was a former weekly low from August 2012 and needs to be broken to keep the primary market trend down.
An overnight bounce lifted the March contract to a 2.688 high holding below 10 day moving average resistance at 2.710. The 10 day average followed by former daily low support between 2.750-2.800 remains the first areas of resistance.
Last week’s high topped out a 2.783 before the market turned back lower into Friday’s close. A rally above 2.800 would turn the near term trend back up with 2.980-3.020 being the next area of resistance.
Hedge funds heavily liquidated existing long positions in the natural gas market according to the Commitment of Trader’s report released on Friday. The fund long futures position fell by 23,400 contracts or 24% to 74,974.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
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