The March 15 natural gas contract moved back higher in Tuesday’s trade extending the late day buying strength that came into the market on Monday.
The March contract gained .074 or 2.7% on Tuesday closing at 2.758 but was unable to breakout above former daily low support between 2.750-2.800. A breakout above this resistance level which includes the 10 day moving average would turn the near term trend back higher.
If 2.750-2.800 resistance is broken, the 2.980-3.020 level will again become the next upside resistance.
If resistance holds, the primary trend will remain down with Monday’s 2.608 low extending down to 2.575 being key support. If 2.575 support is broken, the next support from the weekly chart does not come in until the 2.170-2.230 area.
Bottom line – Another key technical test for the market today. Failure to extend yesterday’s rally could lead to a new market low.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bullish
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