The February 15 natural gas contract traded in a fairly wide .462 range in last week’s trade setting a new contract low at 2.766 in Wednesday’s trade.
The contract was unable, however, to break out below 2.750-2.760 weekly low support which has now held throughout the entire month of January.
With weekly low support holding on Wednesday, the February contract moved higher into Friday’s close settling the week at 2.986, down .141. It was the 8th lower weekly settle out of the past 9 weeks.
The market is weaker in today’s early trade with 2.750-2.760 remaining primary support. A drop under 2.750 will keep the trend bearish with the 2.575 weekly low from August 2012 becoming the next downside support.
2.980-3.020 is the first area of resistance followed by 3.180-3.210. Longer term resistance is the 40 day moving average at 3.335 which coincides with the 3.352 high set two weeks ago. A breakout above these two areas of resistance is needed to turn the trend back higher.
The fund long position in the natural gas market jumped by nearly 22% last week according to the Commitment of Trader’s report released on Friday. The speculative long futures position by the funds is currently 117,764 contracts, up 20,953 from the previous week.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bullish
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