The December 15 natural gas contract rallied back higher on
Friday helping to mitigate a disastrous week for longs in the natural gas
market.
The December contract gained .064 or 2.8% in Friday’s
session but lost .172 (6.9%) for the week settling Friday at 2.321.
An open gap area was created on the continuation chart with
expiration last week of the lower priced November 15 contract. The open
gap begins at the 2.188 contract low for the December contract set on Friday
and extends down to 2.115 and is primary support.
Longer term support is the new 3-year spot contract low set
last week at the 1.948 level by the November 15 contract. Last week’s low
also held above the April 2012 low at 1.902 as support and could be a second
and final seasonal low for 2015 ahead of winter.
Near term, the market should remain weak as it retests above
mentioned support levels.
2.325-2.340 is the first level of resistance today with
longer term resistance at the 10 day moving average currently at 2.420.
Friday’s Commitment of Trader’s report showed the funds long
81,096 futures contracts, down 6,859 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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