A short-covering rally on Wednesday ahead of today’s EIA
weekly storage report lifted the December 15 natural gas contract to a 2.317
morning high before selling back of into the close. The December contract
did gain 9 ticks to settle at 2.262. But the inability to hold onto the
intraday gains is a bearish indicator heading into today’s trade.
Last week’s 2.188 contract low remains primary support
followed by the bottom of the open gap area on the continuation chart at
2.105-2.115. Longer term support is the 2015 spot contract and new 3-year
low set by the expired November 15 contract last week at the 1.948 level.
While last week’s low as some point in upcoming trade may be
retested as support, there is a good chance it will be a seasonal and long term
low for the natural gas market.
The 10 day moving average is the first area of resistance
today at 2.310 followed closely by yesterday’s 2.317 high. A close above
these two resistances areas would turn the near term trend back up possibly
indicating a seasonal low has been set.
Technical Indicators: Moving Average Alignment –
Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
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