The natural gas market closed higher last week for only the second time in the past three months with the March 15 contract gaining 8.7%.
The rally higher came after a successful test of weekly low support from August 2.575 which held as the March 15 contract bottomed out at a 2.567 low.
After settling last Friday at 2.804, the March contract rallied up to a 2.896 overnight high but has since sold back off toward unchanged. Failure to rally above 40 day moving average resistance at 2.915 today keeps the longer term trend sideways to lower.
The 10 day moving average at 2.700 is primary support today with longer term support at the 2.567-2.575 weekly lows.
A breakout above 2.896-2.915 would by a bullish signal for the market turning 2.980-3.020 into the next upside resistance.
The funds added 1,106 contracts to their existing long futures position in the natural gas market according to Friday’s COT report. The current long position is estimated at 76,080 contracts well below the record large long position of 488,901 contracts reached one-year ago when the spot contract was trading above $6.000/MMBtu.
Technical Indicators: Moving Average Alignment – Neutral-Bearish
Long Term Trend Following Index – Bullish (turned higher on Friday)
Short Term Trend Following Index - Bullish
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