Natural Gas Technical Update - Key Support Holds Overnight - Short Covering Rally Upcoming?

The April 15 natural gas contract moved back higher on Tuesday following Monday’s heavy sell off gaining .054 to settle at 2.732.

Yesterday’s rally stalled below 10 day moving average resistance which keeps the primary market trend down.

The April contract did hold above trend line and weekly low support at the current 2.662 overnight low.  Failure to drop under this support may lead to a short covering bounce ahead of tomorrow’s storage report.

The 10 day average at 2.740 is the first area of resistance followed by the 40 day average at 2.800.  Longer term resistance is last week’s 2.864 high and 2.980-3.000.

A drop under the 2.662 overnight low would turn the contract low at 2.589 into the next downside support.

Technical Indicators:  Moving Average Alignment – Bearish
                                         Long Term Trend Following Index – Bullish
                                         Short Term Trend Following Index - Bullish