The May 15 natural gas contract reached a 2.686 early morning high on Tuesday but lost ground into the close settling at 2.640, down 4 ticks.
The primary trend remains down following last week’s breakout from a sideways rectangle pattern with Monday’s 2.608 low being the first area of support.
Longer term support is between 2.567-2.575 which are weekly lows from August 2012 and February 2015. If weekly low support is broken, it will be a very bearish technical signal for the market turning the lower-2.400 area into the next longer term support.
The 2.720-2.730 area which is the lower triangle trend line as well as the 10 day moving average remains key resistance. A rally above this resistance and the 40 day moving average at 2.785 could invalidate the triangle pattern.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bearish
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