A breakout early Tuesday by the October 14 natural gas contract above 10 and 40 day moving average resistance brought in a wave of buying rallying the contract to a 4.016 intraday high over the following 25 minutes of trade.
The October contract fell back under the 4.000 level by the session’s close settling at 3.984, up .108 (2.7%) for the day.
Daily settle above the 10 and 40 day moving average turns the near term trend back higher but the 4.000-4.100 level remains strong resistance. Two rally attempts over the past months have both stalled at this resistance area not including yesterday’s rally.
A breakout above the 4.101 set two weeks ago will likely signal the longer term trend has turned back higher.
The 10 moving average at 3.930 is the first area of support today followed by the 40 day average at 3.905. These two averages are currently in a bullish alignment along with the short and long term trend following indexes.
Key support remains the 3.740-3.760 weekly lows with this week’s current low being 3.761.
Technical Indicators: Moving Average Alignment – Neutral-Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bullish
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