An early rally higher on Wednesday by the November 14 natural gas contract topped out at a 4.184 morning high. And for a third time this week and a fourth time over the past month, weekly high resistance between 4.170-4.200 held.
As resistance held, the market tipped back lower with selling intensifying into the close as the November contract settled the day at 4.023, down .098 or 2.3%.
With resistance holding again, sellers are back in control heading into today’s EIA storage report.
The 10 and 40 day moving averages at 3.990-4.000 will be the first support area of support followed by last week’s 3.845 low which was set on Thursday after release of the weekly storage report.
Longer term, a breakout from the 11-week sideways range is needed to determine the next move for the market. A downside breakout under 3.780-3.840 support would turn the 3.658 contract low into the next area of support for a possible low.
An upside breakout above 4.170-4.200 would turn the 200 day moving average at 4.350 into the next upside resistance. It would also likely turn the longer term market trend back higher.
Technical Indicators: Moving Average Alignment – Neutral-Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bullish
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