The January 15 natural gas contract traded down to a new contract low of 3.585 in Monday’s trade closing the session at 3.595. Losses for the day were sizable coming in at .217 or 5.7%.
The January contract has fallen by 1.104 or 23.5% from the high set on November 11th down to yesterday’s 3.585. But even with recent weakness in the market, the January 15 contract has yet to break under the 3.541 October 28th spot contract low.
Failure to fall under the October low could lead to short covering ahead of Thursday’s EIA storage report. It could also be a turning point back higher for the market.
If 3.541 support is broken, the late-2013 weekly lows at 3.380-3.400 will become the next downside support level.
An important technical test for the natural gas market over the next few sessions.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
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