After trading down to a new 3-week low at the 2.669 level in
Friday’s early session, the August 16 natural gas contract rallied back higher
into the close settling the day at 2.756, up .029 . For the week, the
August contract lost .045 or 1.6% closing lower for a second week in a row.
Early buying interest today has the August contract trading
above 10 day moving average resistance at the 2.755 level. A close
above this average will turn the near term trend back up with following
resistance at 2.820-2.830, the 2.871 weekly high, and the 2.998
early-July high.
Last week’s 2.669 low is the first area of support
followed closely behind by the 40 day moving average at 2.620. A close
back under the 40 day average would likely signal a market top has been set
with the 200 day moving average at 2.450 then becoming the next downside
support.
Friday’s Commitment of Trader’s report showed a slight drop
in the fund long futures position in the market which steadily increased during
the month of June. The fund long position as of the 07-12 close was
estimated at 133,916 contracts, down 2,785 from the previous week.
Technical Indicators: Moving Average Alignment –
Neutral-Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bearish
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