Perhaps it is why it is been in a range of late– April gas traded a little less then $.25/dt range this week (the average range of the last fifteen weeks is .41/dt/wk). After first testing very clearly defined resistance just north of $2 (the zone of resistance between those four monthly lows from around this time last year and the historically important January ’24 low (+/- $1.965 –$2.037), the prompt reversed course after trading to $2.009 and fell to slip the “expiration” gap left on February 27th narrowing it to $1.720 – $1.755. Having tested resistance and then support April ended the week quietly. Friday’s range was only .082, the close .03 lower than a week earlier.
The previous week had a reversal off of the expiration low but the flaw in the almost always significant weekly reversal was a lack of volume. Average daily volume fell more than 80,000 contracts during the reversal week. This week following a test of resistance…which was almost guaranteed by the upside reversal, April fell with increasing volume. Volume on Thursday, when more than 600,000 contracts changed hands with the prompt closing $.111 lower, was the highest since 02/22. This week’s trade with a close lower than the open after trading a higher high is also a reversal…and given the significant increase in volume largely neutralizes the wider range reversal traded the prior week. The close in the lower quadrant of the range traded with increasing volume and open interest is a strong suggestion that April is destined to trade lower, the question is now or later in the month.
