Natural Gas Corner - Technical Update - Short-Covering Lifts Market During Last Week's Trade

The December 15 natural gas contract moved steadily higher in last week’s trade from the new 2.188 contract low set the previous week topping out Friday at a 2.398 high.

Friday’s daily settle for the December contract came in at 2.371, up 7 ticks for the day and .050 or 2.1% for the week.

Selling has come in during the overnight session dropping the December contract back toward 10 day moving average support at 2.305.  A drop under this support will  turn the near term trend back down with following support at the 2.188 contract low.

Last week’s 2.398 high is primary resistance followed by the open gap area between 2.450-2.483.  Longer term resistance is the 40 day moving average currently at  2.615.

The fund net long futures position fell sharply last week as shown by Friday’s Commitment of Trader’s report.  The current position as of last Tuesday’s close was estimated at 52,714 contracts, down 28,376 or 35% from the previous  week.

Technical Indicators:  Moving Average Alignment – Neutral-Bearish

                                         Long Term Trend Following Index – Bearish

                                         Short Term Trend Following Index - Bearish