Natural Gas Corner - Technical Update - Key Resistance Broken In Overnight Trade

The March 16 natural gas contract has broken out above 40 day moving average resistance in today’s early trade.  If the breakout holds, the near term trend for the market will turn back higher.

Prior to the overnight breakout, the March contract had been holding under the 40 as resistance for the past 8 sessions.  With resistance broken, 2.270-2.280 now becomes the next upside resistance with longer term resistance at 2.380-2.390 followed by the 2.493 early-January high.

The 40 day moving average now becomes the first area of support today at 2.190 followed by the 10 day average at 2.155.  A drop back under both averages will turn the near term trend back down with the 2.080 low set last week being the next area of support followed by 1.980-2.000.  If 1.980 support is broken, the 1.910 contract low will then become the next downside support.

Bottom Line – Overnight breakout puts the bears back on the defensive.

Technical Indicators:  Moving Average Alignment – Neutral

                                         Long Term Trend Following Index – Bullish

                                         Short Term Trend Following Index - Bullish