Today will be another important technical test for the
November 15 natural gas contract which broke out above 10 day moving average
resistance on Monday.
The breakout on Monday was the third time this moving
average has been broken as resistance over the past two months. The last two times the November contract
closed above the 10 day average, the market quickly reversed back lower the
following day.
Whether or not the November contract can hold above this
support which is at the 2.485 level today will help to determine underlying strength
behind recent buying.
If moving average support holds, the near term trend will
remain sideways to higher with yesterday’s 2.559 high being the first area of
resistance followed by 2.590-2.600.
A drop back under the 10 day moving average today would keep
the primary market trend bearish with following support at the 2.403 contract
low.
Technical Indicators:
Moving Average Alignment – Neutral-Bearish
Long
Term Trend Following Index – Bearish
Short Term Trend Following Index - Bullish
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