The May 16 natural gas contract finished another week of
very choppy trade on Friday selling back off to end the week.
After topping out at a 2.051 high on Wednesday, the May
contract sold steadily off into Friday’s close to settle a 1.902, down .088 or
4.4% for the five days of trade.
The May contract remains in a 4-week sideways range with
support coming in at the mid-lower-1.800 area and resistance at the lower-2.000
level.
While the market may push up to a new weekly high in
upcoming trade, the primary trend is expected to remain sideways to lower with
a likely retest of 1.731 contract low support once the summer seasonal uptrend
ends.
This could take several more weeks of trade before a final
drop lower occurs. Expect upcoming trade to be very similar to last
week’s – choppy and directionless.
Bottom line - Several more weeks of sideways trade expected.
Friday’s Commitment of Trader’s report showed a slight drop
in the fund long futures position in the natural gas market. The fund
long position as of the 4/12 close was estimated at 106,280 contracts, down
3,492 from the previous week. The fund long position quickly rose above
the 100,000 contract level during late-March/early-April as speculators attempt
to trade the summer rally. The current position remains well below the
488,901 contract all-time high reached in February 2012.
Technical Indicators: Moving Average Alignment –
Neutral
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bearish
No comments:
Post a Comment