A late day rally on Thursday saved what initially looked be a big down day for the December 14 contract.
After rallying up to a new daily high of 4.503 following release of the weekly storage report, the December contract was soon selling back lower as weekly high resistance held near the daily high.
The contract sold down to the 10 day moving average support bottoming out at a 4.250 low with one hour to go in the session. Over the next hour, the December contract rallied up to a 4.489 closing price gaining .118 or 2.7% on the day.
The bulls may have saved the day on Thursday but the bears are back in control in early trade today dropping the market sharply lower.
The December contract rallied up to a 4.533 overnight high but was unable to breakout above 4.544 weekly high resistance. Selling overnight has dropped the contract back toward 10 day moving average support which is at 4.245 today.
If this support is broken, the gap area created on Monday’s open between 4.074-4.113 will become the next downside support. Longer term supports are the 40 day moving average at 4.010 and last week’s 3.931 low.
The market is pulling back today following another unsuccessful breakout attempt overnight. Once support is found, another retest of 4.533-4.544 resistance is expected. A breakout above this resistance would turn the 4.985-5.000 level into the next upside price objective.
Technical Indicators: Moving Average Alignment – Neutral-Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bullish
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