Early weakness on Wednesday dropped the April 15 natural gas contract to a 2.662 morning low.
This low held above trend line and weekly low support which brought in short-covering buying into the session’s close.
For the day, the April contract gained .092 (3.3%) settling at 2.824, a second consecutive higher close.
Yesterday’s rally topped out at a 2.848 high holding below last week’s 2.864 high as resistance. A breakout above these two highs would 2.950 into the next upside resistance.
Wednesday’s settle by the April contract came just above the 10 and 40 day moving averages. The 40 day average is the first support at 2.800 followed by the 10 day average at 2.760.
Longer term, the market is coiling in a sideways range for a probable breakout in upcoming trade. Given the trend for the market over the past 4 months, the breakout will likely be to the downside under trend line support which is currently at 2.660-2.670 (yesterday’s low).
If a downside breakout does occur, it should be the final price break before a post-winter seasonal low is set.
Technical Indicators: Moving Average Alignment – Neutral
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bullish
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