The February 15 natural gas contract traded down to a new contract low of 2.766 in Thursday’s trade but was unable to drop below 2.750 weekly chart support.
This support has been tested on several occasions during the month of January but has held each time. If 2.750 support is broken, the 2.575 weekly low from August 2012 will become the next downside objective.
The first area of resistance today which coincides with the 10 day moving average is 2.980-3.020 with yesterday’s failed rally topping out at a 3.048 high. A breakout above lower-3.000 resistance would turn 3.180-3.210 into the next upside resistance.
Longer term resistance is the 3.352 high set last week followed closely behind by the 40 day moving average at 3.370. A breakout above these two resistance levels is needed to turn the longer term trend back up.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bullish
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