Spoke a couple of weeks ago about Natural Gas’ tendency to define a bias shift as the price changes direction at a support or resistance area and reverse direction on a high volume week. Now we get a reversal higher last week, from and area that had supported the market previously (just below $2.50) and then found support. The lows of last week were just above the 40week SMA, before finding the bid and running upward to end the week over the downward sloping trend line (from the Nov ’23 high and Jan ’24 highs) that had held the market for the first 6 months of the year.
Volume during the last week was high, averaging 574,278 contracts per day. This was significantly higher than the previous week, but well short of the previous reversal week which averaged over 663,000 contracts per day. Similar to the previous reversal week- open interest declined slightly last week. The reversal last week left prices in the extreme over-bought zone for the Weekly RSI but not the Daily RSI, signalling a slight divergence.
