Natural gas prices traded sideways to lower on Tuesday as
the spot July 16 contract held under 6-month high resistance at the 2.635 level
for a second day.
The trend for the market took a sharp upward turn last week
following a breakout above the 200 day moving average for the first time since
July 2014 for the July contract.
The rally has stalled, at least temporarily, at a 2.635 high
set on Monday tying the previous high for the July contract set in
January. If 2.635 resistance is broken, 2.680-2.690 will become the next
upside resistance area.
Tuesday’s 2.535 low is the first area of support followed by
the 10 day moving average currently at 2.520. A drop back under 2.500
could lead to liquidation selling as this was the resistance area the market
broke out above in last week’s trade bringing in a wave of technical buying.
Longer term support is the 200 day moving average currently
at 2.425. A close back under the 200 day average will turn the
primary trend back down.
Bottom line – Will 2.635 resistance continue to hold?
Technical Indicators: Moving Average Alignment –
Neutral-Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Following
Index - Bullish
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