The natural gas market was heavily sold near the end of last week’s trade as the January 14 contract fell back toward a 1-month low.
The market has been extremely volatile during the month of November with the January contract alternating between the lower-4.000 level as support and the mid-4.600 level as resistance.
Selling on Friday dropped the January contract to a 4.088 daily close losing .329 or 7.4% for the week.
The market has continued lower overnight trading under the 4.000 level for the first time since October 31st.
Recent selling is seen as a downside correction within a longer term sideways to higher uptrend. The seasonal price trend for the market suggests new lows will not be set on current weakness which is another buying opportunity.
The January contract’s overnight low of 3.3947 is the first area of support today followed 2013 low at 3.873. Longer term support is the 3.707 low set in late-October.
A small gap created overnight between 4.019 and last Friday’s 4.075 low is the first area of resistance today followed by the 40 day moving average at 4.125.
Once a low forms on current weakness, a reversal back higher into the previous month’s trading range is expected. A breakout above the 4.633-4.689 weekly highs is needed to turn the longer term trend back higher.
The Commitment of Trader’s report was delayed until today due to the Thanksgiving holiday.
Technical Indicators: Moving Average Alignment – Neutral-Bearish
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bearish
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