Natural gas prices tumbled back lower on Monday as the June
contract again fell back under the 2.000 level.
The market has been showing mixed technical signals with a
downside breakout last week reaching a 1.952 low before turning back
higher. The June contract peaked at a 2.133 high on Monday but has since
sold back off settling Tuesday at 1.980, down .075 or 3.6%.
The mid-1.900 area has been solid support for the June
contract since March holding again last week at a 1.952 low.
The trend is once again down following a second breakout in
the past week from the upsloping price channel that has been in place since the
early-March 1.611 low.
Last week’s 1.952 low is the first area of support followed
by 1.872, 1.766, and finally, the 1.611 March low which should be retested as
support in upcoming trade.
The 10 and 40 day moving averages have converged at the
2.040-2.045 area and are the first resistance levels followed by lower channel
trend line resistance currently at 2.090.
Bottom line – Will mid-1.900 support hold again for the June
contract?
Technical Indicators: Moving Average Alignment –
Neutral-Bearish
Long Term Trend Following Index – Bearish (turned lower Tuesday)
Short Term Trend Following Index - Bearish
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