The next few days should be good test of recent strength in
the natural gas market which has been moving steadily higher over the past 2 ½
weeks.
The rally started at the 3.725 low set on July 28th
and topping yesterday at the most recent high of 4.020. The September 14
contract on Tuesday closed the day at 3.974, up 9 ticks for the session.
Selling has come in during the overnight session dropping
the September contract toward 10 day moving average support at 3.900
today. A close below the 10 day average would turn the near term trend
back down with following support at 3.860 and 3.800. Longer term support
is the 3.582 contract low from last November.
The lower-4.000 level has now held as resistance the past
two days. Tuesday’s 4.020 high is the first area of resistance followed
by former weekly chart trend line support which coincides with the 40 day
moving average between 4.050-4.100. A breakout above 4.100 is needed to
turn the longer term trend back higher.
Technical Indicators: Moving Average Alignment –
Neutral-Bearish
Long Term Trend Following Index – BearishShort Term Trend Following Index - Bullish
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