At one point last week the July 15 natural gas contract was
trading .205 (7.5%) higher topping out at a 2.955 high on Wednesday. By
Friday’s close, the July contract had given back most of the early week gains
settling at 2.816, up .066 for the five days of trade.
The trend turned back lower last Thursday with the daily
close back under 10 and 40 day moving average support. These two
averages are now upside resistance at 2.820-2.830.
Selling has come into the market in today’s early trade
dropping the July contract under last week’s 2.739 low as support. If
lower-2.700 support is broken, the 2.540 and 2.556 lows from April and June
will become the next longer term support.
If 2.540-2.556 support is broken, the 2.443 low from the
weekly chart will become the next downside support level followed by 2.230.
The fund long position in the natural gas market jumped by
34% last week according to the Commitment of Trader’s report released on
Friday. The current long position as of last Tuesday’s close was
estimated at 118,636 contracts, up 29,962 from the previous week.
Technical Indicators: Moving Average Alignment –
Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bullish
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