July 15 (Bloomberg) -- Natural gas futures, which yesterday rose the most in a month, will not sustain a rebound unless futures close above both the 10- and 40-day moving averages, according to a technical analysis by MF Global Ltd.

The August futures contract on the New York Mercantile Exchange rose 5.1 percent to close at $3.429 per million British thermal units, below the 10-day average of $3.501 and the 40-day average of $3.795. Prices have dropped 39 percent this year, according to data compiled by Bloomberg.

Yesterday’s rally was “somewhat inconsequential,” Michael Fitzpatrick, a vice president for energy at MF Global in New York, said in a telephone interview. “Gas has not broken the 10-day and 40-day moving average lines. Until we get a settlement above those, the long-term implications will still be for lower” prices.

Moving averages are an indicator used by some technical traders to make buy and sell decisions.

Gas prices would also have to breach the most recent prominent high of $4.09 reached on June 29 to reverse the current downtrend, according to the analysis.

Mild weather and high inventories may prevent a potential rally of gas prices from persisting, and futures look overwhelmingly bearish, according to MF Global.

To contact the reporter on this story: Jenny Gross in New York at Jgross15@bloomberg.net.

Last Updated: July 15, 2009 07:14 EDT