The new front month May 16 natural gas contract has broken out above 40 day moving average resistance at the 1.965 level in today's early trade. If the breakout holds, another leg higher in the market is expected.
The May contract has been well bid since settling a weekly low at the 1.837 level on Monday moving the contract back up toward 40 day moving average resistance. This resistance was first tested and held two weeks ago and was retested again in yesterday's session. Resistance was finally broken today turning the 2.026 mid-March high into the next upside objective followed by the 2015 low at 2.087.
The 40 day moving average now becomes the first area of support today at 1.965 followed by the 10 day average at 1.945. A drop back under both averages will turn the near term trend back down with the 1.837 weekly low being the next area of support. Longer term support is the 1.731 contract low.
Bottom line - Bullish breakout should signal further gains ahead.
Technical Indicators: Moving Average Alignment - Neutral
Long Term Trend Following Index - Bullish
Short Term Trend Following Index - Bullish
No comments:
Post a Comment