The natural gas market set a potentially bullish “higher low” on Monday which was followed by a rally back higher in yesterday’s trade.
The spot September 14 contract briefly broke out above 10 day moving average resistance on Tuesday topping out at a 3.915 high. The market set back slightly into the close with September settling at 3.877, up .085.
The 10 day moving average at 3.885 is the first area of resistance today followed by the 3.915 weekly high. Longer term resistance is last week’s 4.020 high which coincides with the 40 day moving average at the same level. A decisive breakout above the lower-4.000 area is needed to turn the longer term trend back higher.
Weekly lows between 3.725-3.727 will remain primary support in upcoming trade. A drop below 3.725 would keep the market trend down with following support at 3.650 and the 3.582 contract low.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bullish
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