3.740-3.760 weekly low support on the October 14 natural gas contract has now held on three separate occasions since late-July with Monday’s low for the contract coming in at 3.761.
As support held again, the October contract rallied higher into the close gaining .083 (2.1%) to settle at 3.876.
Yesterday’s rally was stalled below 10 and 40 day moving average resistance at the 3.905-3.915 area today. A close above these two averages would turn the near term trend back higher with following resistance at 4.041 and the 4.101 high set two weeks ago. A close above the 4.101 high is needed to turn the longer term trend back higher.
3.740-3.760 will remain primary support in upcoming trade. A drop below 3.740 would keep the primary market trend bearish with following support at 3.724 and the 3.589 contract low.
Once the market does bottom, a seasonal rally back higher is expected.
Technical Indicators: Moving Average Alignment – Neutral-Bearish
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bullish
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