natural gas

natural gas

Friday, February 5, 2016

Natural Gas Corner - Technical Update - Contract Low Support Holds On Thursday




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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