An early rally attempt on Wednesday by the April 16 natural
gas contract reached a 1.899 high, holding under key resistance at the
lower-1.900 level. With resistance
holding for a third day time over the past week sellers came back in dropping
the April contract to a 1.794 daily close losing .069 (3.7%) on the session.
Daily settle back under the 10 day moving average turns the
near term trend back down but the rally may not yet be over. The lower-1.900 area which includes a 3-month
trend line and the 40 day moving is now key resistance followed by the 1.957
high set last week.
A breakout above these
two resistance areas would be a bullish signal for the market turning the 2015
low at 2.017 into the next upside resistance.
1.750 is the first area of support under the current 1.772
overnight low with longer term support at 1.690-1.700 and the 1.611 contract
low.
Bottom line – Is the rally over?
Technical Indicators:
Moving Average Alignment – Bearish
Long
Term Trend Following Index – Bullish
Short Term Trend Following Index - Bullish
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