Natural Gas Technical Update - Showing Signs of Bottoming

The September 14 natural gas contract has broken out above 3.940 resistance in the overnight session.  If the breakout holds, it will be further confirmation that a low has been set in the market.

The September contract on Wednesday briefly broke out above 3.940 resistance topping  out at a 3.950 intraday high.  But it couldn’t hold the gains as the contract settled back under 3.940 closing at 3.933, up .036.

3.980 now become the next upside resistance followed by 4.070-4.080.  Longer term resistance is the 40 day moving average currently at 4.200.  A rally above the 40 day average is needed to turn the longer term trend back higher.

The 10 day moving average 3.840 today is primary support followed by the 3.725 low set two weeks ago.  If 3.725 support is broken, the 3.582 contract low from November 2013 will become the next downside objective.

Today’s price action following the weekly storage report release at 9:30 am will be interesting to watch.  Whichever way the market goes, it will likely be a volatile price move.

Technical Indicators:  Moving Average Alignment – Neutral-Bearish

                                         Long Term Trend Following Index – Bearish
                                         Short Term Trend Following Index - Bullish