The weekly chart for the spot natural gas contract shows the resistance level reached in last week’s trade. This resistance was a former trend line that was broken as support in mid-July near the 4.000 level.
After breaking under trend line support, the market fell a 3.724 low before bottoming in early-August.
The rally higher from the August low topped out last week at a 4.101 high basis the October 14 contract holding below trend line resistance.
The inability to rally the market back over former trend line support was a bearish technical signal which has been followed by selling early this week. This sell off has dropped the market back into a sideways range that now enters into a 7th week.
A breakout and close above the weekly trend line at last week’s 4.101 high is needed to turn the longer term trend back higher.
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