natural gas

natural gas

Monday, March 28, 2016

Natural Gas Corner - Technical Update - A Retest of "Breakout" Resistance This Week?


The April 16 natural gas contract began last week’s trade with a sharp selloff on Monday and trended down in Thursday’s close finishing the session at 1.806.  For the holiday-shortened week, the contract was down .101 or 5.3%.


The 2-week rally which began at the 1.611 contract low set in early-March failed under trend line and 40 day moving average resistance at the 1.957 weekly high.  This resistance is currently at the 1.880-1.920 area and remains primary resistance. 



A breakout above lower-1.900 resistance would be a bullish signal for the market turning 2.017 into the next upside resistance.



The 1.766 overnight low extending down to 1.750 is the first area of support followed by 1.690-1.700 and the 1.611 contract low.



While the market may have one more leg higher on this current seasonal rally, the longer term outlook is for an eventual test of contract low support by the later-dated summer 2016 contracts.



Bottom line – The April contract may be ready for another retest of lower-1.900 “breakout” resistance in this  week’s trade.



The fund long position in the natural gas market jumped by nearly 50% in last week’s trade.  Friday’s Commitment of Trader’s report showed the fund long futures position as of 3/25 at 70,241 contracts, up 23,177 (49%) from the previous week.



Technical Indicators:  Moving Average Alignment – Bearish

                                         Long Term Trend Following Index – Bullish

                                         Short Term Trend Following Index - Bullish

No comments:

Post a Comment