A late day sell off on Wednesday dropped the July 16 natural
gas contract to its worst single day loss since last April as the contract fell
by .091 (3.3%) to settle at 2.677.
Even with yesterday’s loss, the July contract remains above
10 day moving average support at the 2.640 level today. If this support
fails to hold, the near term trend will turn back down with 2.530-2.550 being
the next downside support. Longer term support levels are the 200 day
average at 2.400 followed by the 40 day average at 2.370.
If 10 day moving average support holds, the trend will
remain up with Tuesday’s 2.786 high being the next primary resistance. A
breakout above last week’s high would turn 2.820-2.830 into the next upside
resistance.
Bottom line – A near term and possibly long term high may be
forming in the market.
Technical Indicators: Moving Average Alignment –
Neutral-Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bullish
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