Natural gas prices trend higher last week but remain locked
in a sideways trading range that now enters into a 14th week of
trade.
The front month September 15 contract bottomed out at a
2.706 low last Monday rallying up to a 2.863 weekly high on Wednesday. It
pulled back slightly into Friday’s close settling at 2.798, up .082 or 3% for
the week.
The September contract has rallied above 10 and 40 day
moving average resistance at the lower-2.800 level today turning last week’s
2.863 high and the 2.895 late-July high into the next upside resistance
areas. Longer term resistance levels are the 2.957-2.988 weekly highs and
the 200 day moving average currently at 3.020.
The lower-2.700 area remains key support with a breakout
under this level turning 2.650-2.600 and the 2.590-2.600 weekly lows into
the next support levels.
There is a chance the breakout from the 14-week sideways
range will be to the upside above 2.950-3.030 resistance turning the longer
term market trend back up. But given the market trend since the summer
2014 high, the eventual breakout will likely come to the downside under
2.600-2.700 support.
Fridays’ Commitment of Trader’s report showed the funds long
136,893 natural gas futures contracts, down 7,156 from the previous week.
Funds have been largely absent from the natural gas market this summer as
prices have remained in a sideways range.
Technical Indicators: Moving Average Alignment –
Neutral-Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bullish
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