The next two days of trade in the natural gas market will be technically important in helping to determine the underlying price trend.
After setting a double bottom reversal in last week's trade, the July 15 contract has been trading sharply higher over the following 3 sessions gaining .301 or 11.6%. In yesterday's session, the July contract added on another .045 to settle at 2.891.
If the market can hold up over the next 2 days and rally higher into Friday's daily close, a bullish reversal bar will be posted on the weekly chart. This could bring in further buying in next week's trade.
But if the market slumps back lower, particularly after today's EIA storage report, it could be an indication that the previous downtrend is resuming.
Support for today begins at the 40 day moving average at 2.800 with longer term support at the 10 day currently at 2.715. A close under both averages is needed to turn the trend back down.
Upside resistance for today begins at yesterday's 2.922 high with longer term resistance at the 3.150 May high extending up to the 200 day moving average at 3.220. A breakout above the 200 day average would turn the longer term trend back higher likely indicating a long term market low has been set.
Technical Indicators: Moving Average Alignment - Neutral-Bullish
Long Term Trend Following Index - Bearish
Short Term Trend Following Index - Bullish
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