Natural gas prices finally broke out from a three week
sideways rally on Monday as the spot October contract rallied above 2.725-2.735
resistance.
The contract topped out at a 2.775 high holding under 40 day
moving average resistance at the same level. For the day, the October
contract was up .065 or 2.4% settling at 2.758.
Recent strength from the 2.633 contract low set two weeks
ago could be the beginning of a seasonal rally higher. The current 2.785
high is the first area of resistance with longer term resistance at the 200 day
moving average at 2.930. This average coincides with past price highs and
will be key resistance if reached. A breakout above the 200 day average
will turn the longer term trend back up.
If 40 day moving average resistance holds, former resistance
between 2.725-2.735 will become the first area of support followed by the 10
day moving average at 2.700. Longer term support is the 2.633 contract
low.
Technical Indicators: Moving Average Alignment –
Neutral
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bullish
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