The natural gas market started out last week’s trade on a weaker note but found good buying interest into Friday’s close. The spot April 15 contract gained .105 or 3.8% during last week’s trade settling Friday at 2.839.
Last week’s breakout above 10 and 40 day moving average resistance failed to inspire follow through buying as the market has since reversed in the overnight session erasing all of last week’s gains.
The next downside support is last Monday’s 2.641 low followed by the 2.589 contract low extending down to 2.567-2.575 weekly low support. A drop under 2.567-2.575 support would turn the lower-2.400 area into the next longer term support.
The 10 day moving average at 2.775 is the first area of resistance today followed by the 40 day average at 2.810. A breakout above last week’s 2.864 high is needed to turn the near term trend back higher.
The Commitment of Trader’s report released on Friday showed a sharp drop in the speculative long position held by the funds in the natural gas market. The fund long position was estimated at 73,203 contracts as of the 03/03 close, down 34,872 contracts (32%) from the previous week.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bullish
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