Early buying on Wednesday lifted the May 16 natural gas
contract to a new 2-month high at the 2.137 level. But buying support
began to fade by mid-morning as sellers came back in dropped the contract to a
2.069 daily close, down .019 for the session.
Yesterday’s 2.137 was technically important as it held under
upper channel trend line resistance that has been in place since
early-March. A breakout above yesterday’s high is now needed to keep the
near term trend bullish. If accomplished, 2.200-2.210 will become the
next longer term resistance.
There is a chance yesterday’s high will be a near term and
possibly longer term high for summer prices. A drop under lower channel
trend line and 40 day moving average supports currently between 1.920-1.940 is
now needed to turn the longer term trend back down.
Bottom line – Is a summer top in place?
Technical Indicators: Moving Average Alignment –
Neutral-Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bullish
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