The February 16 natural gas contract has been heavily sold
during 3 out of the 4 sessions this week losing an additional .130 or 5.7% on
Thursday to settle at 2.139.
The February contract is now down .356 or 14.2% from last
Friday’s 2.495 high to yesterday’s 2.139 close falling under the 40 day moving
average on Thursday which turns the primary trend back down.
The February contract has now reached the 61.8% Fibonacci
retracement support at the 2.093 overnight low. This low down to 2.085 is
the first area of support today followed by 1.980-2.000 with 1.980 being the
78% retracement support of the December-January uptrend.
The 40 day moving average at 2.200 now becomes primary
resistance today followed by the 10 day moving average at 2.295. These
two averages along with the market price were in a bullish alignment last week
but the rally failed to hold.
Bottom Line – Market technicals looking increasingly bearish
but the rally may not be over if Fibonacci retracement support can hold today.
Technical Indicators: Moving average Alignment –
Neutral-Bearish
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bearish
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