Natural gas prices moved higher last week as the spot August
15 contract traded back toward the upper end of a 10-week sideways range.
The August contract topped out at a 2.934 high last Tuesday
holding under the 2.977 June high as resistance. It then traded sideways
over the next three days settling Friday at 2.870, up .100 or 3.6% for the
week.
With upper resistance holding last week, the August
contract has traded back down toward key 10 and 40 day moving average support
levels this morning between 2.790-2.810. A close under these two averages
will turn the near term trend back down with 2.644 becoming the next longer term
support followed by the 2.569-2.588 weekly lows.
If weekly low support is broken, the natural gas market
could see another heavy round of selling before a typical post-summer seasonal
low is set.
Friday’s Commitment of Trader’s report (futures only) showed
the funds long 111,994 natural gas contracts, down 5,558 from the previous
week. Funds have been largely absent from the natural gas market this
summer as prices have remained in a sideways trading range.
Technical Indicators: Moving Average Alignment – Neutral
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bullish
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