The April 16 natural gas contract has traded down to a new
contract low at the 1.633 level in the overnight session. This turns a
monthly low at 1.610 from August 1998 into the next key support level.
After rallying higher in Tuesday’s late day trade, the April
contract instantly sold back off in yesterday’s session settling at 1.657, down
.064 (3.7%).
The mid-lower 1.600 area is a multi-year support shelf for
the spot natural gas contract. If this area fails to hold, a much deeper
downtrend could follow with 1.500-1.5200 becoming the next longer term support
level.
If lower-1.600 support holds, 1.680-1.690 will become the
first upside resistance area followed by the 10 day moving average currently at
1.775. A close above the 10 day average could signal a near term low has
been set.
Bottom line – Will 18-year support hold at the lower-1.600
level?
Technical Indicators: Moving Average Alignment –
Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
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