The September 15 natural gas contract has broken out to the
downside from a sideways triangle pattern on the weekly chart today with a drop
under 2.720-2.740 support.
If the breakout holds over the next few days, trade down to
new contract lows is expected.
In yesterday’s session, the September contract lost over
2.6% or .073 settling back toward key support at the 2.728 daily close.
Support has been broken overnight turning 2.650-2.660 and
2.590-2.600 into the next downside support levels. If 2.590-2.600 weekly
low support is broken, 2.440-2.450 and 2.230-2.250 will become the next longer
term support levels.
Former support between 2.720-2.740 now becomes the first area
of resistance followed by the 10 and 40 day moving averages currently between
2.805-2.810.
Technical Indicators: Moving Average Alignment –
Bearish
Long Term Trend Following Index – Bearish
Short
Term Trend Following Index - Bearish
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