For a second time in two weeks, a rally by the April 15 natural gas contract has stalled at a 2.864 high. This high was reached in yesterday’s trade following release of the EIA weekly storage report.
As resistance held, the market turned back lower into the close with April contract losing .090 (3.2%) to settle the day at 2.734.
Daily settle back under the 10 and 40 day moving averages turns the near term trend back down with key support today at 2.660-2.670. This support is a trend line beginning at the 2.589 February low which has been tested several times over the past month.
A close under 2.660-2.670 would turn the 2.560-2.590 area into the next downside support. Longer term support is at the lower-2.400 level.
The seasonal price trend for natural gas over the last 3 and 5 years suggests the next drop could be the final price break before a post-winter low forms in the market.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bearish
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