A two day sell off in the natural gas market has dropped the spot January 15 contract from a 3.936 high set early-Monday down to a 3.605 low by Tuesday’s close, a loss of .331 or 8.5%.
The market remains technically weak as rallies continue to be sold. One of the few potentially bullish signals has been the inability for the spot market to push down to new 2014 lows. Last week’s 3.585 low held above the previous spot contract low of 3.541 set in October.
If 3.541-3.585 weekly support is broken, weekly lows from late-2013 at 3.380-3.400 will become the next downside support.
The January contract has reversed higher in early trade today testing 10 day moving average resistance at 3.690. Following resistance is at 3.800-3.820 and Monday’s 3.936 high.
The market looks trapped in another sideways range. A breakout above resistance at the lower-4.000 area needed to turn the longer term trend back higher.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
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