natural gas

natural gas

Monday, June 6, 2016

Natural Gas Corner - Technical Update - New 4-Month High Set On Monday




Natural gas prices rocketed higher in last week’s trade staging one of the biggest weekly gains of 2016.  The spot July 16 contract gained .229 or 10.5% during last week’s holiday-shortened session closing Friday at 2.398.

A new 4-month high of 2.480 was posted in today’s early session as the July contract attempts an upside breakout above 200 day moving average resistance at the 2.440 level today.

If 200 day moving average resistance is broken, the trend will remain up with the 2.635 high  from early-January becoming the next longer term resistance.

Former resistance between 2.320-2.340 now becomes the first area of support followed by the 10 and 40 day moving averages which are now in a bullish alignment.  The 10 day average at 2.275 is the next area of support under 2.320 followed by the 40  day average at 2.250.

Bottom line – A breakout or failure at 2.400-2.450 resistance?

Friday’s Commitment of Trader’s report showed a sharp drop in the speculative long position held by the funds in natural gas.  The long futures position as of the 05/31 close was estimated at  84,329 contracts, down 23,908 contracts (22%) from the previous week.

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

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