Recent strength on heavy volume in the natural gas market is indicative of a second and final seasonal low for 2014 having been set last week at the 3.541 level.
The rally from last week’s low has lifted the spot December 14 contract back over the 4.000 level for the first time in 4 weeks.
The weekly natural gas chart shows the trend line support in red which was broken in July. A rally the first week of October topped out at a 4.184 high, holding below former trend line support as resistance.
In order to turn the longer term trend back higher for the natural gas market, the spot contract will need to close back above former trend line support. This former support which is now resistance is currently near 4.250.
Coincidentally, 4.240-4.250 are former daily highs for the December contract. Once these highs are broken as resistance, the trend for the natural gas market will be firmly bullish.
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