After gaining more than five percent (13.9 cents) on Monday, natural gas futures for July ’15 delivery pulled back slightly on Tuesday as the commodity failed to break resistance at $2.92 per mmBtu, an area of strong support and resistance in the last six months of price activity.
Including pre-market action today, natural gas has now failed to break $2.92 in four of the last five trading sessions.
“It’s a strong area of resistance,” said Steve Kingston, a reporter for NatGasInvestor.com. “While Tropical Storm Bill has created some attention and thus higher prices, the reality is that there is likely to be little impact to production. Without any impact, $2.92 is likely to stand firmly in the way of higher prices.”
“It’s not going to be taken easily, let’s put it that way,” he said.
Meanwhile, the MACD is continuing to show strength from the recent price movement. The RSI is currently at 55 which indicates there is potential for the commodity to go higher in the short term.
“The market is asking… Are we ready for $3.00 gas again? That’s the question because if $2.92 is broken with conviction, the next stop is $3.00,” said Kingston.
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