The October 15 natural gas contract rallied up to a new
1-month high in yesterday’s trade at 2.794. However, late day selling
dropped the contract back down to a 2.728 daily close losing .030 for the
session.
Tuesday’s rally held under 40 day moving average resistance
which keeps the primary trend sideways to lower. The October contract did
close above former resistance on Tuesday between 2.725-2.735 which needs to be
broken as support in order to turn the near term trend back down.
If 2.725-2.735 support is broken, the 10 day moving average
at 2.690 will become the next downside support. Longer term support is
the 2.633 contract low set two weeks ago. If this low is broken as
support, 2.550-2.560 and 2.440-2.450 will become the next downside price
objectives.
Tuesday’s 2.794 high is the first area of resistance today
with longer term resistance at the 200 day moving average currently at
2.930.
Technical Indicators: Moving Average Alignment –
Neutral
Long
Term Trend Following Index – Bearish
Short Term Trend Following Index - Bullish
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