Natural gas prices held steady for a second day on Tuesday following last week's heavy sell off with the spot July 15 contract moving higher in late day trade to settle at 2.698, up .049.
Current weakness is the third time since early-April that the July contract has traded under the 2.600 level. The first time the contract fell under 2.600, it traded down to 2.582 low before reversing back higher. A second push under 2.600 in late-April dropped the July contract to a 2.540 low which has been followed by a third drop this week to a 2.599 low in yesterday's trade.
The point being that the 2.540-2.600 area has been a reversal point back higher for the July contract the past two times this support has been hit. If the 2.540 contract low is broken as support, the 2.443 low from the weekly chart will become the next downside support level.
Daily highs over the past two days have been at 2.723-2.724 which is the first area of resistance today with longer term resistance at the 40 day moving average currently at 2.785. As long as the July contract trades under the 40 day average, the primary trend will remain sideways to lower.
Technical Indicators: Moving Average Alignment -Neutral-Bearish
Long Term Trend Following Index - Bullish
Short Term Trend Following Index - Bearish
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