The natural gas market finished last week’s trade with a
strong rally higher on Friday as the spot May 16 contract trended back toward
2.137 weekly high resistance.
After rallying up to a new weekly high at 2.147 in late day
trade on Friday, the May contract ended the week at 2.140, gaining .238 or
12.5% over the five days of trade.
A new 10-week high has been set in the overnight session at
2.176 but the May contract has since traded back down .040 lower in this morning’s
early session.
A breakout and close above the overnight high at 2.176 is
now needed to keep the near term trend bullish. The overnight high
briefly moved the May contract above upper channel trend line resistance at
2.150 but the breakout failed to hold.
Key support to watch is the lower channel trend line support
currently at 1.950 followed closely behind by the 40 day moving average at
1.940. A close under both support areas would turn the market trend back
down possibly indicating a summer top has been set.
Bottom line – A choppy sideways to higher up trend
remains in place.
Friday’s Commitment of Trader’s report showed continued
inflows of speculative dollars into the natural gas market. The fund long
futures position as of last Tuesday’s close was estimated at 116,115 contracts
by the report, up 9,875 from the previous week.
Technical Indicators: Moving Average Alignment –
Neutral-Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bullish
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