Today will be another important technical test for the natural gas market which has stabilized over the past 2 sessions following 5 days of relentless selling.
After topping out at an 11-week high last week, the natural gas market has been in a steep correction erasing roughly half the 25% gains made over the previous 4 weeks.
The spot July 15 contract has found interest just above the 40 day moving average at the 2.795 level today. This support has held the past 2 days and could be an area from which the market reverses back higher.
However, if support fails to hold today, the market could be heading back toward new price lows.
If 2.795 support is broken, 2.730-2.740 will become the next downside support followed by 2.580-2.590.
A close back above the 10 day moving average currently at 2.955 is needed to turn the near term trend back higher. If this occurs, the 3.020-3.040 and last week's 3.150 high will become the next upside objectives.
Technical Indicators: Moving Average Alignment - Neutral
Long Term Trend Following Index - Bullish
Short Term Trend Following Index - Bearish
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