The natural gas market traded sharply lower in last week’s
trade as the December 15 contract triggered a bearish triangle pattern.
The downside measuring objective for the triangle which was
initiated last Thursday with a drop under lower-2.300 support has now been
reached overnight with trade down to the 2.100 level.
After losing .216 or 9.1% during last week’s trade settling
Friday at 2.145, the December contract has spiked down to a new contract low at
2.051 in the overnight session but has since moved back toward unchanged.
The natural gas market is retesting weekly low support at
1.948 set by the November 15 contract. Whether or not this
support can hold will be another key technical test for the market.
If support can hold, a long term low could be set.
However, if support is broken, the trend will remain down
with 1.860 and 1.750 then becoming the next downside support levels.
Friday’s Commitment of Trader’s report showed the fund long
position in natural gas (futures only) at 52,572 contracts, down 2,033 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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