The new front month October 15 natural gas contract sold off
on Thursday following release of the weekly EIA storage report.
The sell off dropped the October contract back toward 2.641
weekly low support set on Monday which held as the contract bottomed out at a
2.642 daily low.
As support held, the contract moved back off the daily low
into the session’s close settling at 2.664, down .039 (1.4%).
With support holding again, the market has since moved back higher
in early trade today on short-covering following yesterday’s failed downside breakout.
The primary trend remains sideways to lower with a breakout under
2.638-2.640 weekly low support needed to extend the downtrend. If support is broken, 2.440-2.450 and
2.230-2.250 will become the next longer term support levels.
The 10 day moving average at 2.715 is the first area of
resistance today followed by weekly chart triangle trend line resistance
between 2.740-2.750. The initial
downside objective for this triangle is for trade down to the 2.443 point 1 low
with further downside potential if point 1 support is broken.
Technical Indicators:
Moving Average Alignment -
Bearish
Long
Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
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