The October 14 natural gas contract closed higher for a fourth consecutive day in Wednesday’s session but couldn’t break over 4.000-4.101 resistance.
For a fourth time over the past 9 weeks, lower-4.000 resistance held with the October contract on Wednesday topping out at a 4.040 high. The contract pulled back slightly into the close settling at 4.013, up .018.
Failure to rally higher over the next few days could see another downside sell off similar to past trade. The last three times the October contract pushed into 4.000-4.101 resistance, it subsequently fell back toward 3.740-3.760 weekly low support.
A breakout from this 9 month range is needed to determine the next move for the market. A downside breakout below 3.740-3.760 support would keep the primary market trend down with the 3.589 contract low support then becoming the next downside objective.
An upside breakout above lower-4.000 resistance would turn the longer term trend back higher marking the beginning of a winter rally.
Technical Indicators: Moving Average Alignment – Neutral-Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bullish
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