Technical Outlook:

Nov Natural Gas: Natural gas reversed sharply on Thursday off a double top at key congestion resistance at 3850-3888. The Bulls were unable to defend their support at 3800 resulting in a flush to new 2010 lows at 3610 before closing at 3617. Losses amounted to 24.8 cents on the day with a Bearish outlook for Friday’s session.

Sellers can short rallies initially against 3617-3620 X Resistance area, then against 3686-3705 XX Pivot Resistance. Failures against the Pivot keeps the action on the defensive with near term objectives placed at 3550-3540 X and 3500-3470 XX Support ranges with a mild chance to extend to 3425-3400 XXX today.

On the upside, if the Bulls defend yesterday’s lows at 3610, buyers can step in for potential relief rallies using the 3686-3705 XX Pivot Resistance zone to cover. Trade above 3705 indicates short term strength with trade likely to probe the 3750-3800 XXX Resistance target. All longs today should scale out and/or reverse short at XXX as only a close above 3800 will have Bullish implications heading into the holiday weekend.

Daily Chart:

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