Today will be another important test of underlying strength in the natural gas market following yesterday’s late day sell off.
The July 15 contract rallied up to a 2.955 early morning
high on Wednesday but sold off late into the session’s close settling at 2.855,
down .039.
The market is weaker today as the July contract tests 10 and
40 day moving average support between 2.805-2.815. The next level of support under the moving
averages is the 2.764 low set on the weekly open. A drop under this support would negate the
bullish weekly bar and likely indicate the bearish downtrend has resumed.
If support can hold, the lower-2.900 level will again become
primary resistance with a breakout above yesterday’s 2.955 high needed to keep
the near term trend bullish.
Volatility could increase markedly this morning following
release of the EIA weekly storage report at 9:30 am central.
Technical Indicators:
Moving Average Alignment – Neutral-Bullish
Long
Term Trend Following Index – BearishShort Term Trend Following Index - Bullish
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