A rally attempt yesterday by the October 14 natural gas contract stalled just below the 10 and 40 day moving averages at the 3.905 level. As resistance held, the market turned back to close lower on the day with the October contract settling at 3.816, down .034.
With 10 and 40 day moving average resistance holding on Tuesday, the primary trend remains down as the market again tests 3.740-3.760 weekly low support. This support has held the past 10 weeks and could be broken in upcoming trade.
A drop below 3.740 support would turn the 3.589 contract low into the next downside objective.
Moving average alignment is now bearish with the 10 day average being the first area of resistance at 3.885 followed by the 40 day average at 3.905. Longer term resistance is weekly highs between 4.000-4.101. A breakout above 4.101 is needed to turn the longer term trend back higher.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bearish
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