Natural gas prices fell lower for a second day on Thursday with the spot November 14 contract losing .091 to settle at 3.932. The November contract has fallen .276 or 8.7% from the 4.184 high set on Tuesday down to yesterday’s 3.908 low.
The market has reversed back higher in early trade today with the November currently trading just under the 4.000 level.
Natural gas prices remain trapped in an 11-week sideways trading range with the November contract alternating between support at 3.780-3.850 and resistance at 4.150-4.200. A breakout from this range is needed to determine the next direction for the market.
A downside breakout below support would turn 3.720-3.730 and the November contract low of 3.658 into the next downside support levels.
An upside breakout above 4.150-4.200 weekly high resistance would turn the longer term trend back up with the 200 day moving average at 4.350 becoming the next upside resistance.
Longer term, once a market low is set, a seasonal rally higher possibly back toward the summer highs at the mid-4.800 level 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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