natural gas

natural gas

Monday, March 7, 2016

Natural Gas Corner - Technical Update - A Post-Winter Low May Be Forming




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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