Trade in the natural gas market keeps getting less volatile
by the day as the market trades in a near flat-line, sideways range.
The spot September 15 contract is now trading in a 14th
week of sideways prices with weekly ranges continuing to narrow. The
breakout from this range, whenever it may come, should be quite volatile.
In Monday’s session, the September contract gapped higher on
the open by nearly .020 but held in a very narrow .034 intraday range settling
the session at 2.842, up .044.
The market has since sold back off in today’s early trade
closing the gap created on Monday’s open.
The trend remains sideways as the market alternates between
support at the 2.700-2.710 level and resistance at the lower-2.900 level.
A breakout from this range is needed to determine the next course for the
market.
An upside breakout above lower-2.900 resistance followed by
the 200 day moving average at 3.020 would turn the longer term trend back up
with a seasonal low likely being set in the market.
The greater percentage chance, however, is for the
market to stage a downside breakout under 2.700-2.710 support. If
this occurs, a final leg down for the market is expected with 2.590-2.600
weekly low support becoming the next downside objective.
Technical Indicators: Moving Average Alignment –
Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bullish
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