Natural Gas finally reaches a key support area

Market Update 31st July 2008 [For the complete and illustrated version of this and future Updates be sure to sign up at www.sevendaysahead.com] Over the last three weeks or so Natural Gas prices have dropped some 35%. This deeper/ faster drop than expected has now found some interesting key support and there is technical reason for expecting a bounce soon. WEEKLY CHART – SEP-08: The weekly candle chart of the front month clearly highlights the drama of recent weakness. But now a key support area has been tested – the significant Jun-07 8.829 high plus 76.4% retracement around 8.90. Technically there is better reason now for anticipating some type of recovery. Also see below… DAILY CHART – SEP-08: The one feature we want to draw attention to here is how relatively oversold the RSI indicator has become. Coupled with the clues from the weekly chart we feel justified in looking closely for a s/term rebound soon. As an initial target we would focus on the 10.70 38.2% rebound level. Philip Allwright Mark Sturdy Seven Days Ahead