Natural Gas Corner - Technical Update - Bullish Reversal On The Weekly Chart

A three day rally early last week which lifted the July 15 natural gas contract higher by .301 or 11.6% was followed by two days of lower trade into Friday's close.  Over the last two days of the week, the July contract fell by .172 or 5.8% settling Friday at 2.750.

For the week, the July contract gained .160 or 6.1% posting a potentially bullish bar on the weekly chart.

A potentially bullish "higher low" has been set on the weekly chart between the 2.443 low set the first week of May and the 2.552 low set two weeks ago.  If the market continues higher this week, a multi-week rally back higher could follow.

The 40 day moving average at 2.795 is the first area of resistance today followed by 2.820-2.830.  Longer term resistance is last week's 2.922 high.

The 10 day moving average at 2.735 is the first area of support today. A close back under this area would turn the near term trend back down with following support at the 2.540-2.552 level. 

Friday's Commitment of Trader's report showed the funds long 88,675 contracts, down 25,610 from the previous week.  The funds were active buyers on the May-June uptrend but have been liquidating positions  as the market falls back toward recent low.

Technical Indicators:  Moving Average Alignment - Neutral-Bearish
                                           Long Term Trend Following Index - Bullish
                                           Short Term Trend Following Index - Bearish