natural gas

natural gas

Thursday, June 2, 2016

Natural Gas Corner - Technical Update - Market Gains Nearly 15% In Three Sessions




Natural gas prices rallied sharply higher for a third day on Wednesday as short covering and new technical buying keep the market well bid.

The spot July 16 contract tacked on an additional .093 or 4.1% on Wednesday settling at 2.381, and is up .307 or 14.6% from last Friday’s 2.101 low up to the 2.408 overnight high.

The July contract is approaching a key support area at the lower-2.400 area which includes the 200 day moving average at 2.440 as well as previous daily highs. 

There is a good chance that 2.400-2.450 resistance will not be broken capping the current rally.  However, if the July contract does breakout above this resistance, the 2016 high set in early-January at 2.635 will become the next longer term resistance.

Former resistance between 2.320-2.340 now becomes the first area of support followed by the 40 day moving average currently at 2.240.

Bottom line – Will lower-2.400 resistance cap the rally?

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


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