Yesterday’s expired March 16 natural gas contract traded
down to a new contract low at 1.682 in the session closing the day at
1.711.
Yesterday’s low by the March contract was technically
important as it retested the December 2015 spot contract low of 1.684.
But while yesterday’s low for the March contract was 2 ticks under the December
low, the two levels are close enough to qualify as a double bottom reversal if
it continues to hold as support.
The new front month April 16 contract is currently trading
roughly .100 above the low set yesterday by the March contract. It is
assumable yesterday’s low will again be tested by the April contract. If
it can hold for a second time, a post-winter low could be set in the market.
The trend at this point remains down with the 1.747 contract
low set by the April contract on Thursday being the first area of support
followed by weekly low support at 1.682-1.684. If weekly low support is
broken, the trend will remain down and 1.610 will become the next downside
objective.
The 10 day moving average currently at 1.880 will remain
primary resistance in upcoming trade. A close above the 10 day average
could indicate a trend turn back higher.
Bottom line – Will weekly low support continue to hold?
Technical Indicators: Moving Average Alignment –
Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
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