A post-EIA report rally on Thursday lifted the October 15
natural gas contract from a new contract low set earlier in the day.
The October contract fell to a 2.633 early morning low
breaking under the previous low from last April by ½ cent. With no follow
through selling coming in, the market reversed back toward unchanged ahead of
the weekly storage report.
A late day rally moved the October contract to a 2.725 daily
settle, up .077 or 2.9% for the day.
Yesterday’s strength was likely short-covering as many
traders are out ahead of the holiday weekend.
The primary trend remains sideways to down with Thursday’s
2.633 low being the first area of support for the October contract followed by
2.550-2.560. Longer term support is the 2.443 late-April low which is
also the downside objective for the bearish triangle pattern on the weekly
chart.
Thursday’s 2.735 high is the first area of resistance
followed by the 40 day moving average at 2.800.
Technical Indicators: Moving Average Alignment –
Bearish
Long Term Trend Following Index – Bearish
Short
Term Trend Following Index - Bearish
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