Last Friday’s breakout by the March 15 natural gas contract above 40 day moving average resistance failed to hold on Monday as the market ran into a wall of selling at the lower-3.000 level.
The March contract at one point was trading up nearly .090 topping out at a 3.039 early-morning high. Selling into the close dropped the contract to a 2.879 daily settle, down .072 (2.4%) for the day, and closing well below the intraday high.
Even with yesterday’s sell off, the March contract remains above 2.800-2.810 support which needs to be broken to turn the near term trend back lower.
If 2.800-2.810 support which includes the 10 day moving average is broken, 2.690-2.700 and 2.640-2.650 will become the next downside support levels. Longer term support are weekly lows between 2.567-2.575 reached two weeks ago.
2.880-2.900 is the first area of resistance today followed by 2.980 extending up to yesterday’s 3.039 high.
Technical Indicators: Moving Average Alignment – Neutral
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bullish
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