The June 16 natural gas contract began last week’s trade
with a sharp sell off on Monday but then flat-lined into Friday’s close
settling at 2.101. For the week, the June contract lost .077 or 3.5%.
The trend for the market is expected to remain sideways to
possibly higher with choppy trade ahead. The June contract bottomed out
at a 2.026 low last week which is primary support followed by 1.940 and
1.970. Long term support is the 1.844 contract low set in March.
Two rally attempts last week both topped out between
2.170-2.195 which remains resistance this week. A breakout above 2.195
would turn the 2.304 mid-April high into the next upside resistance.
Bottom line – Rallies should continue to be sold keeping the
market in a sideways trend.
The fund long position in natural gas plummeted last week by
18% after increasing the previous 5 weeks. Friday’s Commitment of
Trader’s report showed the funds long 107,667 contracts as of last
Tuesday’s close, down 24,218 contracts from the previous week.
Technical Indicators: Moving Average Alignment –
Neutral
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bearish
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