After holding above weekly low support just under the 2.700 level on Monday, the April 15 natural gas contract reversed course back higher on Tuesday moving back toward the upper end of the past 3 week trading range.
The rally on Tuesday topped out at a 2.858 intraday high holding below the 2.864 high set over the past two weeks.
With resistance holding for a third time, the market has tipped back lower in this morning’s early trade with the April contract trading back toward the 2.800 level.
Failure to clear weekly high resistance keeps the April contract in a sideways rectangle pattern with 2.660-2.680 being lower trend line support and 2.860-2.870 being upper resistance.
A breakout from this range is needed to determine the next move for the market. A downside breakout below 2.660-2.680 support would turn 2.400-2.450 into the next longer term support. While an upside breakout above 2.860-2.870 resistance would turn the 3.045 February high into the upside price objective.
Given the longer term trend in the market, the breakout from the rectangle will likely be to the downside under lower support.
Technical Indicators: Moving Average Alignment – Neutral
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bullish
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