Today will be another important test for the natural gas
market following yesterday’s breakout by the April 16 contract above 10 day
moving average resistance.
The spot April 16 natural gas contract has not closed above
the 10 day average since January 29th when the breakout failed and
the market quickly sold off back lower.
With the April contract again closing above this average on
Wednesday settling at 1.752, it will be interesting to see if the market can
extend recent gains.
The near term trend is now bullish with yesterday’s 1.784
high extending up to 1.800 being the first area of resistance. A breakout above 1.800 would turn 1.865-1.880
into the next upside resistance area with longer term resistance at the 40 day
average currently at 2.005.
The 10 day average at 1.715 is primary support today as a
drop back under this level will turn the near term trend back down with the
1.610 low again becoming key support. A
close under 1.610 support which is a monthly low dating back to August 1998
would be a very bearish technical signal turning 1.500-1.520 into the next
longer term support.
Bottom line – Bulls taking over control of the market.
Technical Indicators:
Moving Average Alignment – Neutral-Bearish
Long
Term Trend Following Index – Bearish
Short
Term Trend Following Index - Bullish
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