The March 16 natural gas contract traded down for a third
day out of the past four trading sessions on Thursday bottoming out at a new
7-week low of 1.954.
Yesterday’s low was technically important as it held above
the 1.910 contract low set in mid-December as support. The
inability to push down to a new contract low has brought early buying today on
a combination of short-covering and buyers attempting to pick a low in
the market.
Even with overnight strength, the trend for the market at
this point remains sideways to down with the 1.910-1.954 weekly lows remaining
primary support.
A former daily low from mid-January at 2.080 is the
first area of resistance with longer term resistance at the 10 day moving
average currently at 2.120 followed by the 40 day average at 2.170. A
breakout above 10 and 40 day moving average resistance would be a bullish
signal for the market.
Bottom line – Contract low support held on Thursday. A
lasting bottom or a temporary low?
Technical Indicators: Moving Average Alignment –
Bearish
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bearish
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