Natural gas prices closed sharply higher on Tuesday led by
gains in the spot May 16 contract which added .148 or 7.6% settling the session
at 2.088.
A new 2-month
high at 2.137 has been set in the
overnight session but the market has since pulled back from this high and is
currently near unchanged.
The May contract remains in an upwardly sloping channel with
the overnight high holding under upper channel trend line resistance shown in
black. A breakout above the 2.137
overnight high would keep the near term trend bullish with 2.200-2.210 being
the next upside resistance.
Former daily high resistance at 2.074 extending down to
2.050 now becomes the first area of support today with longer term supports at
the 1.995 (10 day moving average) and the 1.920-1.930 area.
1.920-1.930 represents both 40 day moving average as well as
lower channel trend line support. If support
is broken, the trend for the market will turn back down likely leading to a
retest of the 1.731 contract low.
Bottom line – Summer rally may be nearing an end if upper
trend line resistance at today’s 2.137 high continues to hold.
Technical Indicators:
Moving Average Alignment – Neutral-Bullish
Long
Term Trend Following Index – Bullish
Short Term Trend Following Index - Bullish
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