The August 16 natural gas contract reached an important area
of support on Wednesday, a support level which has not been tested since the
latest leg higher began in late-May.
This support is the 40 day moving average which was reached
on Wednesday at the 2.455 level and has been broken on Thursday as the August
contract has bottomed out at a 2.625 low.
The overnight low is technically important is it represents
the 38% Fibonacci retracement support of the March to July uptrend at the
2.415 level. If this support fails to hold, the longer term trend will
turn back down with the 50% retracement support at 2.500 then becoming the next
downside objective.
The August contract has since rallied back higher today
toward unchanged from the overnight low and could be ready to continue
higher. A close back above the 40 day moving average at 2.660 could
reignite bullish momentum but the short and long term trend following
indexes are now both in a bearish alignment favoring lower prices.
Bottom line – A key technical test for the natural gas
market today.
Technical Indicators: Moving Average Alignment –
Neutral-Bullish
Long Term Trend Following index – Bearish
Short Term Trend Following Index - Bearish
ENERGY :
ReplyDeleteCrude Oil April and Brent Oil May series are marginally up at $ 52.68 and $ 55.14 a barrel, respectively.
Natural Gas April expiry has declined 0.3 percent at $ 2.805.capitalstars