Natural Gas Corner - Technical Update - Key Resistance Holds Last Week

The February 16 natural gas contract traded down to a new 3-week low in last week’s early trade but moved sideways to higher into Friday’s close.  Over the five days  of trade, the February contract finished the week exactly where it began at the 2.139 level.

The 40 day moving average held as daily high resistance throughout all of last week’s trade keeping the near term trend down.  Last week’s 2.044 low is the first area of support followed by 1.980-2.000.  If 1.980 support is broken, the 1.802 contract low set in mid-December will become the next downside objective.

The 40 day moving average has converged with the 10 day average at the 2.170 level which is key resistance today.  A close above both averages will turn the near term trend back up with following resistance at 2.370-2.380 and the 2.495 high set two weeks ago.

Bottom Line – Bears at this point are back in control.

Technical Indicators:  Moving Average Alignment – Neutral-Bearish

                                         Long Term Trend Following Index – Bullish

                                         Short Term Trend Following Index - Bearish