Following the largest one week gain since the end of the run to the November ’18 Q4 high, the September contract extended the gains another .118/d, to close the week at the highest weekly close since 11/22/19. Expecting a building resistance just above $2.25 and the likelihood of correction back to substantial support, never occurred but buying commencing at the 40 – week SMA of September gas (followed by the hedge funds) ended the potential for lower offers. The price rebound during the week extended into the close, with higher volume and gains in open interest and a close above the historically important January high is an indication that the September contract will continue to push further before expiration. The August, September, October, November ’19, April and May ’20 highs of September gas all traded between 2.410 and 2.499 which could be expected as the destination for the recent gains.
While negative price action seems remote, prices will be testing the zone from $2.28-$2.25 and the area around $2.16 before expiration in all likelihood. Testing those areas are not as important as what happens to prices while testing that area.