Today’s expiring September 14 natural gas contract rallied up to a new 2-week of 3.978 in early trade on Tuesday but couldn’t hold the early gains as it fell lower into the session’s close.
The September contract finished the session with a .026 loss settling at 3.911. A potentially bearish dark cloud cover Japanese candlestick was also posted on Tuesday’s daily bar but hasn’t been confirmed with lower trade today.
The market is instead higher in early trade today pushing against 40 day average resistance at the 3.950 level. A breakout above the 40 day average followed by the 4.020 high set two weeks ago would turn weekly chart resistance between 4.050-4.100 into the next upside objective. A breakout above 4.100 would turn the longer term trend back higher.
If resistance holds, the 10 day moving average at 3.870 will become the first area of support followed by the 3.828 weekly low. Longer term support levels are the 3.725-3.727 weekly lows set over the past month.
A drop below 3.725 would keep the primary trend down with following support at 3.650 and the 3.582 contract low set last November.
Once a low does form, the market should begin a sideways to higher seasonal uptrend into the early months of 2015.
Technical Indicators: Moving Average Alignment – Neutral-Bearish
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bullish
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