Natural gas prices tumbled lower on Friday as a
short-covering rally on Thursday was met with a wall of selling during Friday’s
session.
The September 15 natural gas fell by .079 or 2.8% on Friday
settling the day at 2.676. For the week, the contract lost .125 or 4.4%.
A new 3-month low at 2.624 has been set in the
overnight session turning the 2.590-2.600 weekly lows from earlier this year
into the next downside support. If weekly low support is broken,
2.440-2.450 and 2.230-2.250 will become the next longer term support levels.
Former weekly low support at 2.680 is the first area of
resistance with longer term resistance at the 10 day moving average currently
at 2.755 and the 40 day average at 2.790.
The bearish triangle on the weekly chart initiated last week
remains intact. The 2.443 point 1 low of the triangle remains the initial
downside objective.
Friday’s Commitment of Trader’s report showed the funds long
128,272 natural gas futures, down 9,067 from the previous week.
Technical Indicators: Moving Average Alignment –
Bearish
Short Term Trend Following Index – Bearish
Long Term Trend Following Index - Bearish
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