natural gas

natural gas

Wednesday, June 15, 2016

Natural Gas Corner - Technical Update - 2016 High Resistance Holds For A Second Day




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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