natural gas

natural gas

Wednesday, April 20, 2016

Natural Gas Corner - Technical Update - Is The Summer Rally Nearing A Top?




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

No comments:

Post a Comment