Today’s expiring June 16 natural gas contract has been
heavily sold after breaking out for a second time under lower channel trend
line support near the 2.000 level on Monday.
The June contract did close higher on Wednesday settling up
.012 at 1.992 but has since sold back off in today’s session to a new 5-week
low at 1.935.
The trend remains down with the 1.872 April low being the
next downside support followed by the 1.766 late-March low. Longer term
support is the 18-year spot low at 1.611 which is expected to be retested as
support at some point in upcoming trade.
The 10 day moving average has now crossed under the 40 day
average turning the 10,40 and 200 day average alignment into a bearish
positioning. The 10 day average is the first area of resistance at 2.025
followed by the 40 day average at 2.040.
Bottom line – Bulls running for cover.
Technical Indicators: Moving Average Alignment –
Bearish
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bearish
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