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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