Natural Gas Technical Update - Entering Into A 13th Week Of Sideways, Range Bound Tade

Natural gas prices fell lower for a second week in last week’s trade as the market enters into a 13th week of sideways, range bound trade.

The November contract has been locked in a sideways, range during this time period alternating between support at the 3.780-3.830 level and resistance at the 4.150-4.200 area. 

In last week’s trade, the November contract traded back toward the lower end of this range bottoming out at a 3.815 low on Thursday.  The market firmed slightly on Friday as the November contract finished the week at 3.859, down .180 or 4.5%.

With support holding for a sixth time last week, the market may trend back higher near term as it has for the past 3 months.  But the primary trend remains sideways to lower with a high chance for at least  one final downside breakout to new lows before a seasonal bottom is in place.

Once the market does bottom, a breakout above weekly highs at the 4.150-4.200 level is needed to turn the longer term trend back up.

Friday’s Commitment of Trader’s report showed funds long 164,176 contracts, down 10,945 from the previous week. 

Technical Indicators:  Moving Average Alignment – Bearish
                                         Long Term Trend Following Index – Bullish
                                         Short Term Trend Following Index - Bearish