Natural gas prices gained ground for a third on day on
Wednesday as the spot September 15 contract moved back toward resistance at the
lower-2.900 level. For the day, the September contract was up .087 or 3%
settling at 2.931.
Yesterday’s rally was the third time since mid-June the
September contract has moved into the 2.900-3.000 area. The past
two times this resistance was reached, the market quickly reversed back lower.
Wednesday’s 2.934 high extending up to the 2.988 June high
is primary resistance followed by the 200 day moving average at 3.020. A
breakout above these resistance areas would turn the longer term trend back up.
If resistance holds, the 10 and 40 day moving averages
at 2.815-2.820 will become the next longer term support followed by
2.700-2.710.
The triangle pattern on the weekly chart could be triggered
on the bullish side with a breakout above 2.930-3.020 resistance. Odds
still favor a downside breakout from this triangle toward new price lows in
upcoming trade.
Bottom line – A key technical test for the natural gas
market following yesterday’s rally higher toward breakout resistance.
Technical Indicators: Moving Average Alignment -
Neutral
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bullish
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