Author: Willis Bennett

Trying to Define

Daily Continuous

Have been discussing the market trying to establish a base for the next bias direction, either up or down, and is the definition of a technical range trade that will likely hold for the near term.

Major Support: $3.60-$3.584, $3.16-$2.97, $2.727, $2.648,
Minor Support : $3.827-$3.801 $3.742
Major Resistance: $4.00, $4.168, $4.461, $4.501, $4.551, $4.746-$4.75, $5.031

Daily Continuous

Nothing really new after yesterday’s trade as the market continued into the range after a strong start before slight correction. Still believe this is a market with a long term bullish bias but needs to correct and develop a base to rally from.

Major Support: $3.60-$3.584, $3.16-$2.97, $2.727, $2.648,
Minor Support : $3.827-$3.801 $3.742
Major Resistance: $4.00, $4.168, $4.461, $4.501, $4.551, $4.746-$4.75, $5.031

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Range Remains

Weekly Continuous

After consecutive poor weekly closes following the price spike to $4.901, April nearly completed the thought of a regression to the continuation 20 – weeks SMA. The expiring prompt traded as low as $3.689 (the value of the 20 week avg was $3.655) before recovering enough to go off the board at $3.861, a little under March ($3.906) but higher than January ($3.644) and February ($3.535). Four calendar ’25 settlements in relatively close proximity suggests that he gas market is adjusting to a higher price level and is/has (or will) come to some kind of uneasy equilibrium. New prompt May followed the expiring prompt lower and tested support at its January high before reversing back through its 50 – day SMA. Well bid into the close May posted a gain for the week, its first since the high weekly close on 03/07 ($4.456).

Characteristically, in a healthy uptrend volume increases as prices push higher. When a correction occurs volume should diminish. As can best be seen, aside from the volume divergence that occurred during the week of the spike high (a higher high with lower volume) that is what has occurred since the January low and periodically before. Particularly the three higher weekly closes following that January low with increasing volume, the “inside” week with a lower close with diminished volume and more volume as prompt April traded to the early March high weekly close. Since then, with lower closes volume for each week has steadily diminished. This week’s lower volume reversal after April lost ground into expiration is an indication that the gas market is not ready to run back toward the highs, but suggests that the foundation is being laid.

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The Process Continues

Daily Continuous

Usually there are short – term trends between that support and resistance but when volatility is elevated those boundaries are defined by high volume highs and lows. For May gas there was a high volume low on 02/18 at $3.628, another on 03/03 at $3.810. It is pretty rare but in both cases high volume highs were traded on the following day at $4.326 and $4.588, respectively. In both cases the combined volumes of those two days is greater than any other two day period. The zone between the lows is definable support, between the highs is resistance. Volume is the energy that drives price higher…or lower. Volume on the day of the price spike to $4.901 was substantially lower than on the days that defined the zone of resistance (discussed in the Daily). The energy to drive prompt gas higher was simply not present, hence the breakout failed. Also note that volume was lacking on 03/27 when May tested the support and the breakdown failed. While, price and volume are doing the right things for prices to eventually move higher, a correcting substantial increase in volume is going to be required in order for that to occur. I stand that the market will need to consolidate and build for that sponsorship to develop and until, it is going to be range bound.

Major Support: $3.60-$3.584, $3.16-$2.97, $2.727, $2.648,
Minor Support : $3.827-$3.801 $3.742
Major Resistance: $4.00, $4.168, $4.461, $4.501, $4.551, $4.746-$4.75, $5.031

Supported Expiration

Daily Continuous

Found it interesting that the May contract went down to the key mid term support at $3.74 before building a rally. Will stay away from this market today and set up some option strategies for the Q2 rally coming in the next few months.

Major Support: $3.60-$3.584, $3.16-$2.97, $2.727, $2.648,
Minor Support : $3.827-$3.801 $3.742
Major Resistance: $4.00, $4.168, $4.461, $4.501, $4.551, $4.746-$4.75, $5.031

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Nothing New as Expiration is Upon Us

Daily Continuous

Nothing has occurred that wasn’t discussed in the Weekly and Daily on Monday– so I chose to be quiet. Nothing really happened yesterday that was dramatic or earth shattering to a technical interpretation but I did want to send a quick flag for the expiration– It should hold the March lows of $3.742 and if it breaks that level we may see a brief test of the major support sub $3.60 with the April contract or the May contract as it takes over as prompt.

Major Support: $3.60-$3.584, $3.16-$2.97, $2.727, $2.648,
Minor Support : $3.827-$3.801 $3.742
Major Resistance: $4.00, $4.168, $4.461, $4.501, $4.551, $4.746-$4.75, $5.031

Weak Close Suggests More Down Side

Daily Continuous

While the down side movement has now created “mixed” signals to the bias going forward, the move during March still embraces a more bullish environment for gas prices longer term. As far as April goes this week the headline says it all. The way market has finished the last couple of weeks, does not instill supreme confidence of a rally into the expiration — but rather the opposite.

Major Support: $3.60-$3.584, $3.16-$2.97, $2.727, $2.648,
Minor Support : $3.827-$3.801 $3.742
Major Resistance: $4.00, $4.168, $4.461, $4.501, $4.551, $4.746-$4.75, $5.031

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New April Closing Low

Weekly Continuous

After consolidating in a daily closing range of about $.20 for five days April violated a slightly rising short term trend line with the highest volume of the week. The low of the week followed but sponsorship at the continuation 50 – days SMA limited further decline. Prompt gas tested, held and recovered from the continuation 50 – day for the third time since 02/18, but the violated trend line limited the recovery and April closed below $4.00 for the first time during March.

For all but an hour or so that the spike to and failure at $4.901 lasted, April has spent its entire tenure as prompt between a high volume low traded on 03/03 ($3.742) and a high volume high traded on 03/04 ($4.551) . The extremes of those two expanded ranges present important support and resistance for the upcoming months) particularly the lower one which now is approximately equal to the 50 – day SMA of soon to expire April gas.

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A Break Below $4.00

Daily Continuous

Price action broke through the $4.00 level which has been a formidable area of support for nearly a month– now what? I am going to consider this with a “neutral” bias and will wait to see confirmation today. Want to look at the volume and open interest levels from this week and relate them to the price declines. What happened a few days back (higher highs on higher volume and increasing open interest) should not be discounted to the semi-weekly reversal mentioned in my Weekly on Monday. The market (as it does quite often) is sending conflicting technical signals.

Major Support: $3.16-$2.97, $2.727, $2.648,
Minor Support : $3.827-$3.801 $3.742
Major Resistance: $4.00, $4.168, $4.461, $4.501, $4.551, $4.746-$4.75, $5.031

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Consolidation

Daily Consolidation

No Daily yesterday as there was no change to comments from the day before– wanted to just make the comment today (even though nothing changed) that the market wants to test resistance after a very weak challenge of support. The fact that the challenge was so weak is important to understand that there seems to be an underlying support for prices above $4.00. Time will tell.

Major Support: $3.16-$2.97, $2.727, $2.648,
Minor Support : $4.00, $3.827-$3.801 $3.742
Major Resistance: $4.168, $4.461, $4.501, $4.551, $4.746-$4.75, $5.031

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