Natural gas last week fell to the lowest price level since
June 2012 as the spot November 15 contract was heavily sold.
A failed rally attempt last Monday was followed by strong
selling into Friday’s close as the November contract bottomed out at a 2.403
low settling the week at 2.451. For the five days of trade, the November
contract was down .180 or 6.8%.
The initial downside objective for the bearish triangle
pattern on the weekly chart was met last week with the drop to the 2.442 point
1 low.
There are currently no signs of a market low but weakness
last week is the type of “capitulation” selling typical near market bottoms.
2.385-2.403 is the first area of support today followed by
weekly chart support at 2.230-2.250.
The current overnight high at 2.473 is the first area of
resistance today with longer term resistance at the 10 day moving average
currently at 2.570. A close back above the 10 day average could be a
signal the market is bottoming.
The fund long position in natural gas plummeted last week by
21% as the market fell to a new 3-year low. Friday’s Commitment of
Trader report showed the fund long position as of last Tuesday’s close at
79,132 contracts, down 20,727 from the previous week.
Technical Indicators: Moving Average Alignment –
Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
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