Natural gas posted an inside day with a lower close on Monday ending a two day short covering bounce off last week's low. The low range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near term.
If August extends last week's decline, the reaction low crossing at 3.710 is the next downside target. From a broad perspective, August needs to close above 4.820 or below 3.520 to confirm a breakout of this spring's trading range and point the direction of the next trending move.
First resistance is the 10 day moving average crossing at 4.12
Second resistance is the reaction high crossing at 4.57
First support is last Wednesday's low crossing at 3.87
Second support is the reaction low crossing at 3.71
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