A three day rally in the natural gas market which lifted the July 15 contract higher by 11.6% earlier in the week came to a halt on Thursday as the market sold back off.
The selloff dropped the July contract lower by .066 (2.3%) to settle the day at 2.825.
Bulls are back on the defensive again today as the July contract tests 40 day moving average support at 2.795. A drop under the 40 day average would turn the 10 day average at 2.725 into the next downside support. If 10 day moving average support is broken, the trend will turn back down.
The 2.922 weekly high remains primary resistance followed by 2.945-2.950. Longer term resistance is at the 3.150 mid-May high and the 200 day moving average currently at 3.220. A close above the 200 day average will turn the longer term trend back up.
Technical Indicators: Moving Average Alignment – Neutral
Long Term RMI Trend Following Index – Bearish
Short Term RMI Trend Following Index - Bullish
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