natural gas

natural gas

Tuesday, June 14, 2016

Natural Gas Corner - Technical Update - 2016 Contract High Resistance Holds On Monday




The July 16 natural gas contract rallied up to a new 5-month high at 2.635 on Monday tying the previous high for year set in January.

With yearly high resistance holding, the July contract traded sideways to lower into the close finishing the session at 2.585, up .029.

The market may be ready for a pullback following a two week rally which lifted the July contract higher by .534 or 25%.  The 10 day moving average currently at 2.490 should be tested in upcoming trade.  Whether or not this support holds will be a key technical test  for the market.

Much of the buying support that came into the market last week materialized on the breakout above the 2.495 yearly high.  A drop back under this level could initiate liquidation selling with following support at the 200 day moving average currently at 2.425.

A rally above the 2016 contract high at 2.635 is needed to keep the near term trend bullish with the next level of resistance being 2.680-2.700.

Bottom line – 2016 contract high resistance holds on Monday.  Near term or long term top?

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

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