Natural gas prices moved back higher on Monday from key
support reached late last week with the September 15 contract gaining .032 to
settle at 2.748.
With support holding again at last Friday’s 2.706, buyers
have come back in on short-covering and new technical buying.
Buying has continued overnight moving the September contract back toward 10 day
moving average resistance at 2.800 followed by the 40 day average at
2.825.
A breakout above moving average resistance would turn last
week’s 2.895 high into the next upside resistance followed by weekly high
resistance between 2.950-2.980.
The current rally will likely fade at one of the above
mentioned resistance area to be followed by another sell off back lower.
Longer term, a breakout from the 3 ½ month sideways range is expected which
should drop the market under 2.590-2.600 weekly support to set new price lows
in the market.
There is a smaller (25%) chance the breakout from the
sideways range will instead come to the upside above 2.950-2.980
resistance. If this occurs, the longer term market trend will turn back
up.
Technical Indicators: Moving Average Alignment –
Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
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