The new front month November 14 natural gas contract is currently higher in overnight trade testing upside resistance between 4.100-4.163.
With the October 14 contract expiring on Friday, the support and resistance areas for the November 14 contract will need to shifted higher. While the October contract had been trading in a sideways range between 3.740 support and 4.100 resistance over the past 11 weeks, the November contract trading range has been higher.
The trading range for the November contract has been between 3.786-3.845 as support and 4.100-4.163 as resistance. A breakout from this range is needed to determine the next direction for the market.
An upside breakout above 4.100-4.163 resistance would turn the longer term trend back higher with the 200 day moving average at 4.355 becoming the next upside resistance.
If today’s rally stalls under resistance as it has 4 times over the past 11 weeks, the November contract will likely sell back off in a retest downside support. A breakout under support in the mid-3.800 area would keep the primary market trend down turning the 3.786 July low followed by the 3.658 November contract low into the next downside support areas.
Funds added to existing long position in the natural gas market according to Friday’s Commitment of
Trader’s report. The report showed funds long 192,316 contracts (futures only), up 7,224 contracts from the previous week. Funds are going to likely try to play the typical seasonal rally in the natural gas market and may be active buyers on a breakout above 4.100-4.160 resistance.
Technical Indicators: Moving Average Alignment – Neutral-Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bullish
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