The August 15 natural gas contract fell to a new 1-month low
at 2.644 on Thursday following release of the EIA weekly storage report.
It then reversed back higher into the session’s close
gaining .041 (1.5%) to settle at 2.726. A potentially bullish piercing
line Japanese candle stick was also posted on yesterday’s daily bar.
Yesterday’s 2.644 low held above key weekly low support
between 2.569-2.588. The inability to push under weekly low support may
have brought in short-covering near yesterday’s close.
The primary trend remains sideways to lower with a drop
under weekly low support needed to keep the downtrend intact.
Following support is the 2.443 spot contract low set in early-May.
If buying continues today, the 10 day moving average will
become the first area of resistance at 2.760 followed by the 40 day moving
average and trend line resistance between 2.820-2.840. A breakout
above 2.820-2.840 resistance would be a bullish technical signal turning the
near term trend back up.
Technical Indicators: Moving Average Alignment –
Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
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