July Natural Gas: Natural gas prices fell sharply on Thursday to 4408 on a move that developed initially off the rejection at 4600 and accelerated on the break below 4500. The EIA report added fuel to the move which left natty down 16.5 cents on the day at 4412. The trend is down, but the market is currently finding support on its 50-MA at 4400-4380, therefore, we have a Flat to Bearish bias today. Mild selling on rallies is suggested while trade below 4380 sustains the downtrend action. Trade above 4520 (7-day downtrend) is expected to neutralize the Bears.

Seller can look to short rally efforts against 4470 R1 Pivot, then against 4500-4520 R2 Resistance zones with 1.5 cents Stops suggested above each respective zone. Scalpers can take profits off against 4400-4380 S1 while the break below 4380 triggers drives to 4340-4300 S2 Target Support range. Continue to sell rallies against broken S1 with the key target at 4250 S3, the 100-MA. Extended declines may reach 4200 S4 Support.

On the upside, buyers can scalp off of 4400-4380 S1 Support with Stops below 4365 suggested and look to cover on a bounce to 4470 R1 to 4500-4520 R2. A break above 4520 is moderately Bullish on trade potentially sparking a short squeeze to 4575-4605 R3 up to 4654-4660 R4 upper targets. A buying opportunity is also seen below at 4250 S3, the 100-MA, as typically the market gets a counter move off of it. A quick pop to 4300-4340 is likely, and a move back to 4400 is possible.

Daily Chart:

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