The November 14 natural gas contract traded in fairly wide .252 range in last week’s trade. The contract rallied up to a 4.184 high early on Wednesday but sold off to a 3.932 low by Thursday. A rally higher on Friday moved the contract to a 4.039 close settling one cent higher for the week.
With weekly chart trend line resistance holding for a second time at last week’s 4.184 high, the primary trend remains sideways to lower.
The market now enters into a 12th week of range bound trade with support for the November contract beginning at 3.845 and extending down to the 3.786 low set in July. A drop under 3.786 would turn 3.720-3.730 and the 3.658 contract low into the next downside support areas for a possible seasonal low.
The 10 and 40 day moving averages at 3.990-4.000 are the first areas of resistance today followed by 4.040-4.050. Longer term resistance is between 4.150-4.200. A close above this resistance is needed to turn the longer term trend back higher.
The speculative long position in the natural gas market fell last week according to the Commitment of Trader’s report released on Friday. The fund long position (futures only) fell by 17,195 contracts to 175,121 contracts.
Technical Indicators: Moving Average Alignment – Neutral
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bearish
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