The natural gas market last week traded back down toward a
3-year low set 2 weeks ago with the November 15 contract bottoming out at a
2.410 weekly low.
Last week’s 2.410 low was technically important as it held
above the previous low of 2.403 as support. The inability for the market
to trade down to a new 2015 spot contract low last week may have set up a
double bottom reversal at the 2.400-2.410 level.
The November contract closed Friday’s session at 2.430
losing .072 or 2.8% for the week.
Early buying today has moved the November contract toward
the first area of resistance which is the 10 day moving average at
2.485. A rally above the 10 day average will turn last week’s 2.578
high into the next upside resistance.
A breakout above last week’s high and the 40 day moving
average at 2.640 would be a bullish technical signal for the market likely
signaling that a second and final seasonal low for 2015 has been set.
If resistance holds, 2.403-2.410 will remain primary
support. If broken, 2.230-2.250 will become the next longer term support.
The funds came back into the market last week lightly adding
to their existing long position. Friday’s Commitment of Trader’s
report showed the funds long 85,469 contracts, up 5,675 from the previous week.
Technical Indicators: Moving Average Alignment –
Bearish
Long Term Trend Following Index – Bearish
Short
Term Trend Following Index - Bullish
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