Natural Gas Corner - Technical Update - Weekly Low Support Holds On Monday

An failed early rally attempt on Monday was followed by a steep selloff into the session’s close by the August 16 natural gas contract which lost .099 (3.5%) to settle the session at 2.702.

The one positive note for the bulls on Monday was that the August contract bottomed out at a 2.696 low,  one tick under the level the market bottomed out at last week.

With weekly low support holding, buyers have come back in during Tuesday’s early trade.

The August contract has now closed under the 10  day moving average for four consecutive days which is a bearish indicator.  A drop under 2.696 weekly low support is now needed to extend the downtrend with following support at 2.650 and the 40 day moving average currently at 2.580.

Former daily lows between 2.725-2.750 are now the first areas of resistance followed by the 10 day moving average currently at 2.825.  A close back above the 10 day average will turn the near term trend back up likely leading to a retest of the early-July 2.974 high.

Bottom line – Bulls down but not yet out.

Technical Indicators:  Moving Average Alignment – Neutral-Bullish

                                         Long Term Trend Following Index – Bullish

                                         Short Term Trend Following Index - Bearish