Natural gas prices moved sharply higher for a second time this week in Wednesday’s trade with the December 14 contract gaining 3%.
The December contract rallied up to a 4.508 intraday high but was unable to breakout above 4.544 weekly high resistance. It pulled back from the daily high to close the session at 4.371, up .127.
The trend remains up but the December contract has now failed to clear 4.450-4.500 resistance on five separate occasions over the past two weeks including the overnight session.
Failure to breakout quickly above 4.544 could see trend turn back lower possibly dropping the market back toward the 4.000 level. The 200 day moving average has been broken intraday as resistance but there hasn’t been a daily close above this average since last June which is another bearish signal.
A breakout above 4.508-4.544 weekly high resistance would turn the 4.985-5.000 highs set in early-2014 into the next longer term price objective.
If resistance holds, the gap area between 4.074-4.113 created on Monday’s open will likely be closed followed by a retest of 40 day moving average and last week’s low as support between 3.931 and 4.000.
The next few days of trade will be very important technically in helping to determine the upcoming trend for the market.
Technical Indicators: Moving Average Alignment – Neutral-Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bullish
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