The near term trend for the June 16 natural gas contract has
turned back higher following a failed downside breakout in last week’s trade.
The June contract last Wednesday broke out to the downside
from a price channel which has been in place since the early-March low.
The breakout under lower channel trend line support near the 2.000 level
dropped the June contract to a 1.952 low during Thursday’s session but the
contract ended the day higher.
The June contract has now broken out to the upside back
above former trend line support near the 2.070 level today which negates last
week’s breakout and turns the near term trend back higher.
The 2.128 overnight high is the first area of resistance
followed by weekly high resistance between 2.180-2.200. A breakout
above 2.200 would turn the 2.315 high from late-January into the next longer
term resistance.
The lower channel trend line becomes support again today at
2.070 followed by last week’s 1.952 low.
Bottom line – Bearish pattern failure could lead to a
volatile price reversal in the opposite direction.
Technical Indicators: Moving Average Alignment –
Neutral
Long Term Trend Following Index – Bullish
Short Term Trend Following Index
- Bearish
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