The natural gas market has closed lower 5 out of the past 5
weeks dropping to a new 18-year low in last week’s trade.
Last week’s low was technically important as the spot April
contract bottomed out at the 1.611 level on Friday holding above the 1.610
monthly low as support posted in August 1998.
After settling last Friday’s session at 1.666, down .125 or
7% for the week, the April contract has again retested last week’s low as support in the overnight session
bottoming out at 1.612.
The inability for the market to set a new price low in the
face of very bearish fundamental news could indicate a post-winter low is
forming.
1.680-1.690 is the first area of resistance today for the
April contract followed by the 10 day moving average currently at 1.735. A close above the 10 day average which has
not been broken as resistance since late-January could be an indication a near
term low has formed.
A drop under 1.610 support will keep the longer term
downtrend intact with following support at 1.500-1.520.
Friday’s Commitment of Trader’s report showed the funds long
58,500 natural gas futures, down 6,617 from the previous week.
Technical Indicators:
Moving Average Alignment – Bearish
Long
Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
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