The May 16 natural gas contract turned back lower in Thursday’s session after failing to clear resistance at the lower-2.000 area reached earlier in the week.
After topping out at a 2.051 high on Wednesday, the May contract
lost .066 (3.2%) in Thursday’s session closing the day at 1.970.
The market remains in a sideways trend with the 40 day
moving average at 1.920 being the first area of support followed by the 1.892
weekly low set on Monday. Longer term support levels are at 1.837 and the
1.731 contract low.
The 10 day moving average broken as support on Thursday is
the first area of resistance today at 1.970 followed by the 2.051 weekly high.
The contract low is expected to be retested as support in
upcoming trade. However, the market may continue to chop in a sideways
trend first before a final low is set likely later this summer.
Bottom line – Sideways trend expected to continue.
Technical Indicators: Moving Average Alignment – Neutral
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bullish
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