Natural gas prices came under selling pressure for a second day on Tuesday as the spot May 16 contract falls back toward the middle of the past 6-week trading range.
After posted a new 10-week high at the 2.176 level on
Monday, the May contract has sold steadily back lower losing an additional .031
on Tuesday to settle the day at 2.032.
The May contract has been in an upwardly sloping price
channel since setting a new contract low at the 1.731 level in
early-March. The upper end of this price channel was reached on
Monday. The lower end of this price channel is currently near 1.960 and
will remain key support in addition to the 40 day moving average at 1.950.
A close under lower channel and 40 day moving average
supports will turn the longer term trend back down likely leading to a retest
of the 1.731 contract low as support.
Bottom line – Until channel support or resistance is broken, expect choppy, sideway trade.
Technical Indicators: Moving Average Alignment –
Neutral-Bullish
Long Term RMI Trend Following Index – BullishShort Term RMI Trend Following Index – Bullish
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