Natural Gas Corner - Technical Update - Market Remains Very Weak

An early start higher on Wednesday by the August 15 natural gas contract hit a wall of selling at the 2.755 level dropping the contract to a lower close for a third consecutive day.  By day’s end, the August contract had lost .031 (1.1%) settling at a new 1-month low of 2.685.

The primary trend remains sideways to lower as the August contract approaches a key support levels which are weekly lows set over the past two months between 2.569-2.588.  These two lows need to be broken as support to keep the downtrend intact.

If weekly low support is broken, 2.443 which is the current spot contract low for 2015 set in May will become the next downside support level.

Yesterday’s 2.756 high extending up to the 10 day moving average at 2.770 is the first area of resistance today with longer term resistance at the 40 day moving average currently at 2.830.  The 40 day moving average has been solid resistance the past 3 weeks.  A close back over this average would turn the near term trend back up.

Technical Indicators:  Moving Average Alignment – Bearish

                                         Long Term Trend Following Index – Bearish

                                         Short Term Trend Following Index - Bearish