The September 14 natural gas rallied up to but failed to
clear 3.980 resistance in Thursday’s trade topping out at a 3.981 intraday
high.
A late session sell off dropped the September contract to a
3.876 daily settle, down .054. A potentially bearish outside range day
(engulfing pattern Japanese candlestick) was also posted.
Yesterday’s sell off has not been confirmed with lower trade
today and could be just a near term setback before the market continues higher.
A breakout above yesterday’s 3.981 high would likely confirm
that a near and possibly long term low has been set in the market will the next
area of resistance becoming 4.070-4.080.
The 10 day moving average is the first area of support today
at 3.845 followed by the 3.761 weekly low. Longer term support is the
3.725 low set two weeks ago. A drop under this low would keep the
market trend bearish turning the 3.582 contract low from last November into the
next downside support.
Bottom line – The next few days of trade should give an
indication as to whether or not a seasonal low for the market has been set.
Technical Indicators: Moving Average Alignment –
Neutral-Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bullish
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