A five day rally by the November 15 natural gas contract
came to an end on Tuesday, at least temporarily, as the contract was well sold.
After topping out at a
2.559 morning high, the November contract sold back down to a 2.498
close losing .037 (1.4%) on the day.
Trade should remain choppy and volatile as the November
contract will likely retest the 2.403 contract low set two weeks ago as support
in upcoming trade.
Near term, another rally back higher is expected given
recent strength in the market. Yesterday’s
2.559 weekly high is the first area of resistance followed by 2.590-2.600. Longer term resistance is the 40 day moving
average currently at 2.670.
The 2.472 overnight low is the first area of support
followed by 2.440-2.450 and the 2.403 contract low. If contract low support is broken,
2.230-2.250 will become the next longer term support level.
Technical Indicators:
Moving Average Alignment – Bearish
Long
Term Trend Following Index – Bearish
Short Term Trend Following Index - Bullish
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