The July 15 natural gas contract made a bullish reversal on
Monday closing above the 10 day moving average for the first time since the day
the market topped at a 3.150 high in May.
Yesterday’s rally higher follows a sell off last week
which dropped the July contract to a 2.556 low holding above the 2.540 contract
low set in late-April as support. The inability to a set a new price low
brought in short-covering on Monday which has continued in the overnight
session.
The July contract finished yesterday’s session at 2.705,
gaining .115 or 4.4% on the day. 10 day moving average
resistance broken on Monday now becomes the first area of support today at
2.685. As long as the July contract trades above the 10 day average, the
near term trend will remain up.
The market is currently higher in the overnight
session with the 40 day moving average at 2.785 being the next upside
resistance followed by 2.810-2.820. A breakout above these two resistance
levels will turn the longer term trend back up with the 3.030-3.150 weekly
highs posted over the past 4 months again becoming the next likely stop for
the market.
2.540-2.556 remains primary support followed by 2.443 weekly
low support.
If the natural gas market closes higher on a weekly basis
this Friday, a very bullish reversal may have taken place in the natural gas
market.
Technical Indicators: Moving Average Alignment –
Neutral-Bearish
Long Term Trend Following Index – BearishShort Term Trend Following Index - Bearish
No comments:
Post a Comment