The July 15 natural gas contract found good buying interest
at the lower-2.700 level for a third day on Wednesday gaining .033 to settle at
2.759.
The July contract is currently trading near the middle of
the past month’s trading range with support for today again coming in at
the lower-2.700 level. A drop under the 2.700 level would turn the
2.540-2.556 weekly lows into the next downside support.
The top of the gap area at 2.808 created on Monday’s open
has now been completely closed with today’s daily high being 2.811.
The 2.800-2.830 area which includes the top of the gap as
well as the 10 and 40 day moving averages is key resistance today. A
breakout above 2.830 would turn the near term trend back up with following
resistance at the upper trend line currently at 2.910-2.920. A breakout
above upper trend line resistance would be a very bullish technical signal for
the market but is not expected.
Longer term, there might be a bearish right triangle
forming on the July contract. A breakout below 2.540-2.556 support
is needed to trigger the pattern.
Technical Indicators: Moving Average Alignment –
Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
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