natural gas

natural gas

Thursday, May 19, 2016

Natural Gas Corner - Technical Update - Bearish Breakout On Wednesday


Natural gas prices traded down for a third day out of the past four session on Wednesday as the June 16 contract broke out to the downside from a price channel on the continuation chart that has been in place since the March 2016 low.

The daily continuation chart shown today illustrates the upwardly sloping price channel the market has been trading in for the past 2 ½ months.

Lower channel trend line support near 2.000 was broken yesterday by the June 16 contract and now becomes primary resistance near the 2.050 level today.

If the June contract remains below 2.050 over the next few days of trade, the trend will turn back down with expectations for a retest of the early-2016 lows.

A rally and close back above former trend line support near 2.050 by the June contract will likely negate yesterday’s breakout turning the near term trend back higher.

 Bottom line – Bearish breakout on Wednesday.  Will it hold?

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

 

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