The natural gas market may be on the verge of a bearish downside breakout following selling in the overnight session.
The early selling erases all of yesterday’s gains during which the November contract rose .059 to settle at 3.957.
The first area of support today is a trend line drawn under recent lows between 3.860-3.870. A drop below 3.860 could lead to heavy selling possibly back to and under the 3.786 low set in July.
The 40 day moving average which held as resistance on Tuesday is the first area of resistance today at 3.975 followed closely behind by the 10 day average at 4.005.
Longer term resistance levels are the 4.163 and 4.184 weekly highs posted over the past 5 weeks. A breakout above the 4.150-4.200 is needed to turn the longer term market trend up.
Technical Indicators: Moving Average Alignment – Neutral-Bearish
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bearish
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