Sunday, August 29, 2010
Natural Gas Weekly Technical Outlook
In the bigger picture, the strong break of 3.81 support last week confirms that whole decline from 6.108 has resumed. Further fall should be seen to 100% projection of 6.108 to 3.81 from 5.194 at 2.896 next. More importantly, the development revived the case that medium term rebound from 2.409 is completed at 6.108 already. Also, fall from 6.108 might indeed be resuming the long term down trend for a new low below 2.409. We'll pay attention to the structure of the current decline for more hints. On the upside, break of 4.288 resistance is needed to be the first signal of bottoming. Otherwise, outlook will remain bearish.
In the longer term picture, while the bounce from 2.409 was strong, it's been limited below 55 months EMA (now at 5.877) and reversed. The failure to sustain above 55 weeks EMA (now at 4.617) also argue that 2.409 might not be the bottom yet. We'll stay bearish as long as this year's high of 6.108 holds and favor a new low below 2.409 going forward.
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