Today’s expiring October 1 4 natural gas contract traded in a fairly wide .151 intraday range during yesterday’s trade. After spiking down to a 3.823 low following release of the weekly storage report, the contract moved steadily higher into the close topping out at a 3.974 high and settling at 3.971, up .060.
The October contract rallied up to a 3.989 overnight high but has since turned back lower in early trade today. The inability to hold yesterday’s gains as the market again topped out at lower-4.000 resistance is a bearish indicator heading into today’s trade.
The 10 and 40 day moving averages at 3.910-3.915 are the first areas of support followed by the previous daily lows in the 3.790-3.810 area.
A drop under weekly low support between 3.740-3.800 would keep the market trend bearish with the next downside objective then becoming the 3.589 contract low set last November.
A breakout above 4.000-4.101 resistance would turn the longer term trend back higher ahead of the upcoming winter.
Technical Indicators: Moving Average Alignment – Neutral
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bullish
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