natural gas

natural gas

Tuesday, July 19, 2016

Natural Gas Corner - Technical Update - Bullish Uptrend May Not Yet Be Over




An early morning breakout attempt on Monday by the August 16 natural gas contract failed to inspire follow through buying as sellers instead used the early strength to sell the market back lower.

After topping out at a 2.799 morning high, the August contract fell steadily lower into the close settling the session at 2.722, down .034.

The August contract has moved back higher in Tuesday’s early trade as it remains in a two week sideways range. 

Eight consecutive daily settles under the 10 day moving average is a bearish technical indicator but the market has so far held up well as dips continue to be bought.

Last Friday’s 2.669 low is primary support followed closely behind by the 40 day moving average at 2.645.  A close under both support areas will turn the trend back down with the next longer term support being the 200 day moving average currently at 2.450.

The 10 day moving average at 2.750 has been broken as resistance in today’s session turning Monday’s 2.799 high into the next upside resistance.  Longer term resistance areas are the 2.871 high set last week followed by the 2.998 early-July high.

Bottom line – Another upside spike back toward the 3.000 level?

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

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