The natural gas market has now closed higher three weeks in a row with the June 15 contract on Friday trading above the 3.000 level for the first time since late-February.
Recent strength in the market follows a price break which dropped the spot contract to a 31-month low at 2.443 in late-April. The rally over the following three weeks has lifted the June 15 contract higher by 22% up to last Friday's 3.016 closing price.
The trend for the market remains up with last week's 3.036 high being the first area of resistance followed by 3.090-3.100.
Former resistance between 2.970-2.980 broken late last week now becomes the first area of support today with longer term support at the 10 day moving average currently at 2.885. It was from 10 day moving average support that last week's rally began.
The seasonal rally for the natural gas market is currently in progress. Hedge funds which had almost completely exited the market two weeks ago have been back buying futures. Friday's Commitment of Trader's report showed the fund long position in the market increasing by 51% from 64,001 contracts to 96,565, up 32,564 from the previous week.
Technical Indicators: Moving Average Alignment - Neutral-Bullish
Long Term Trend Following Index - Bullish
Short Term Trend Following Index - Bullish
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