The April 16 natural gas contract continues to slowly
grind higher closing up 8 out of the past 9 sessions.
Recent strength in the April contract follows it setting a
new contract and 18-year spot low at the 1.611 level on March 4th.
This low coincided with a previous monthly low at 1.610 from August 1998 and
was considered an important support level.
With support holding, the April contract has since reversed
back higher on short-covering and new technical buying closing Wednesday at
1.868.
1.898 weekly high resistance has been broken in the
overnight session turning the 40 day moving average currently at 1.960 into the
next upside resistance. If 40 day moving average resistance holds, it
could mark a near term top to the rally.
The 10 day moving average at 1.785 will remain primary
support as a close back under this average will turn the trend back down.
Longer term, a retest of the 1.611 contract low is expected
once the post-winter rally ends possibly at the 40 day moving average.
Bottom line – Will 40 day moving average resistance hold?
Technical Indicators: Moving Average Alignment –
Neutral-Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bullish
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