Natural gas prices surged higher for a second day in Wednesday’s trade with the February 15 contract gaining nearly 10% on very heavy volume.
After rallying above lower-3.000 resistance in early trade, the February cleared the next area of resistance at the 3.176-3.220 level by the session’s close settling at 3.233.
Buying has continued overnight rallying the February contract back toward yesterday’s 3.338 high. This area is the first level of resistance today followed by an open gap created in mid-December between 3.400-3.481. Longer term resistance is the 40 day moving average currently at 3.560.
Former resistance at the lower-3.300 level now becomes the first area support followed by 3.176-3.220. Longer term support is the 10 day moving average currently at 2.985.
As long the February contract trades above the 10 day average, the near term trend will remain up. A breakout above the 40 day average is needed to turn the longer term trend back up.
Technical Indicators: Moving Average Alignment – Neutral-Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bullish
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