The October 15 natural gas contract has broken out to a new
contract low in the overnight session.
Early selling today follows a volatile week of trade which
saw the October contract rally up to a 2.794 high in last Tuesday’s
session. But by Friday’s close, the contract had sunk to a 2.605 closing
price, down .088 or 3.2% for the week.
The primary trend remains down with the 2.550 overnight low
extending down to 2.540 being the first area of support.
Longer term support is the 2.443 spot contract low set in
early-May. This low is the initial downside objective for the bearish
triangle pattern on the weekly chart. If 2.443 support is broken,
2.230-2.250 will become the next longer term support.
Former contract low support at 2.602 is now the first area
of resistance followed by the 10 day moving average at 2.670.
Current weakness should be the final sell off before a
post-summer seasonal low is set in the market.
The hedge funds added to their existing long position in the
natural gas market according to Friday’s Commitment of Trader’s
report. The current position as of last Tuesday’s close was estimated at
106,832 contracts, up 12,147 from the previous week.
Technical Indicators: Moving Average Alignment –
Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
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