The February 16 natural gas contract traded back toward the
lower end of the weekly range on Wednesday losing .058 (2.5%) to settle the
session at 2.267.
The February did hold above the 40 day moving average for a
fourth consecutive day on Wednesday which keeps the near term market trend
bullish.
The 2.386 high set last week is the first area of resistance
with a breakout above this level turning 2.500-2.520 into the next upside
resistance. Longer term resistance is at 2.570-2.630.
The 10 and 40 day moving averages are on the verge of a
bullish crossover and have converged at the 2.240-2.250 level. This area
is key support today as a close under both moving averages will turn the near
term trend back down.
Bottom Line – A key test of underlying market strength today
following this morning’s expectedly bearish EIA weekly storage report.
Technical Indicators: Moving Average Alignment –
Neutral-Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bullish
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