A gap lower open on Monday dropped the April 15 natural gas contract to a 2.691 early morning low. As 2.680-2.700 weekly low trend line support held again, the contract moved off the morning low to settle the day at 2.733, down .053 (1.9%).
Buying has come back into the market overnight rallying the April contract toward 10 and 40 day moving average resistance between 2.770-2.790. A breakout above this level would turn the lower-2.900 level into the next upside resistance.
2.680-2.700 remains primary support in today’s trade.
Longer term, a breakout from the sideways range that has been in place since early-2015 is needed to determine the next direction from the market.
A downside breakout under 2.680-2.700 support would keep the primary market trend bearish. An upside breakout above lower-3.000 resistance would turn the longer term market trend back up.
Given the trend for the market over the past 5 months, odds favor a downside breakout under lower trend line support.
Technical Indicators: Moving Average Alignment – Neutral-Bearish
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bullish
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