The February 16 natural gas contract traded down to a new
3-week low at 2.044 in Tuesday’s session closing down for a 5th out
of the past 6 days.
There was good buying interest throughout the day between
2.050-2.200 with the February contract settling the day at 2.091, down 9 ticks.
The trend remains sideways to down but could turn back
higher near term with a breakout above moving average resistance. The 40
day moving average which held as resistance on Tuesday is the first area of
resistance today at 2.185 followed by the 10 day average currently at 2.245.
The 2.045 low set on Tuesday is the first area of support
followed by 1.980-2.000. A drop under 1.980 and the 1.802 contract low
set in mid-December will become the next longer term objective.
Bottom Line – Time for another short-covering rally?
Technical Indicators: Moving Average Alignment –
Neutral-Bearish
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bearish
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