The March 15 natural gas contract rallied back over a key resistance area between 2.750-2.800 in Wednesday’s trade topping out at a 2.857 morning high. Light selling into the close dropped the contract back under the 2.800 level settling at 2.797, up .120 or 4.5%.
The natural gas market has been moving higher over the past two following a failed breakout attempt early this week below 2.575 weekly low support from August 2012. The March contract briefly broke under this low falling to 2.567 before reversing back higher.
The rally back higher in today’s trade above former daily low support from January at the 2.800 level is a bullish indicator. If the rally continues, the 2.960-3.000 area which includes the 40 day moving average as well as former daily highs will become the next upside resistance level.
2.750-2.800 remains primary support as a drop back under this area would likely signal the rally has ended with following support at the 10 day moving average at 2.685. Longer term support levels are the 2.567-2.575 weekly lows. A close under this support could see a drop toward the 2.200-2.250 level longer term.
Technical Indicators: Moving Average Alignment – Neutral-Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bullish
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