natural gas

natural gas

Monday, May 16, 2016

Natural Gas Corner - Technical Update - A Retest Of Key Support Upcoming




The June 16 natural gas contract traded back lower on Friday ending the week nearly where it began at the 2.096 level, down 5 ticks for the five days of trade.

Late week selling followed an early-week rally during which the June contract tried several times to breakout above 2.180-2.200 weekly high resistance topping out at a 2.185 high.

Selling in today’s early trade has dropped the June contract under 10 and 40 day moving average support between 2.095-2.100.  This turns the lower-2.000 area back into primary support.

A drop under the lower-2.000 level will likely indicate a summer top has been set  to be followed by an eventual retest of the 1.844 contract low as support.

A rally back above 2.095-2.100 moving average resistance would again turn the 2.180-2.200 area into the next upside resistance. 

Bottom line – Key test of lower-2.000 support upcoming after last week’s failed breakout attempt.

The funds added to their existing long position in the natural gas market last week according to  the Commitment of Trader’s report released on Friday.  The fund long futures position as of last Tuesday’s close was estimated at 124,326 contracts, up 16,659 from the previous week.

Technical Indicators:  Moving Average Alignment – Neutral-Bearish
                                         Long Term Trend Following Index – Bullish
                                         Short Term Trend Following Index - Bearish

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