A seasonal low for the natural gas market may have been set following Monday's successful retest of the July low as support.
The September 14 natural gas contract set a contract low for 2014 in late-July bottoming out at 3.725. The contract then rallied higher for the next two weeks topping out last week at a 4.020 high.
The sell off from the 4.020 high bottomed yesterday at a 3.727 low, holding two ticks above the July low. The inability to break under previous low support could be the beginning of a seasonal trend turn back higher.
The September contract closed Monday's session at 3.792, up .016.
The 10 day moving average at 3.885 is the first area of resistance today followed by the 4.020 high set last week. Last week's high coincides with the 40 day moving average at 4.030 today and will be key area of resistance.
A breakout above the 40 day average would turn former weekly chart trend line support into the next resistance between 4.050-4.100. A breakout above this final area of resistance would turn the longer term market trend back higher.
3.725-3.727 will remain primary support. A drop under 3.725 would keep the longer term market trend down with 3.650 and the 3.582 contract low being the next downside support levels.
Technical Indicators: Moving Average Alignment - Bearish
Long Term Trend Following Index - Bullish (turned higher yesterday)
Short Term Trend Following Index - Bullish
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