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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