Early selling on Monday dropped the September 15 natural gas
contract back toward 2.590-2.600 weekly low support.
As support held with the contract bottoming out at a 2.624
intraday low, the contract firmed into the session’s close finishing the day at
2.650, down .026.
Failure to take out weekly low support on Monday has led to
renewed short-covering in the overnight session. The 10 day moving
average at 2.745 is the first area of resistance followed by the 40 day average
at 2.795.
A drop under 2.590-2.600 weekly low support is needed to
keep the current downtrend intact with following support at 2.440-2.450 and
2.230-2.250.
The bearish triangle pattern triggered on the weekly chart
has lower trend line resistance near 2.730-2.750 which coincides with 10 day
moving average resistance on the daily chart. This is the resistance
level at which the downtrend should resume, if reached.
A close back above the lower-2.900 level will negate the
bearish triangle pattern.
Technical Indicators: Moving Average Alignment –
Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index -
Bearish
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