Author: Willis Bennett

No Fake Out — Prices Hold Above $3.00

Daily Continuation

Have discussed here for the last week about testing and breaking above $3.00. Last week, prices had a wonderful opportunity but failed, retracing back into the range. Then on a Sunday night prices open above the key resistance area and stay above throughout the day. As mentioned a couple of weeks ago, Natural Gas had not shown the strength of the other commodities in price action this spring, perhaps it is catching up. If so– this run will likely last into the July trade and perhaps longer– the key is this week setting up expiration. Clearly, the longer term analysis brought forth in the fall regarding the higher highs and higher lows remains in place.

Major Support: $3.001, $2.883, $2.78, $2.71-$2.70, $2.658, $2.52, $2.422-$2.414
Minor Support:$2.876, $2.694, $2.483, $2.162
Major Resistance: $3.12, $3.251, $3.31, $3.396

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Sunday Night Fake Break or Real

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Was going to discuss, yet another failure at key resistance, but the open on Sunday night caught me be surprise. As discussed last week, and this week in the Weekly section, was expecting June contract to meander in the range created during the month, with the break above pushed back until the July contract takes over as prompt– It will be interesting to see if the break above holds during the day. Would be cautious here until the day defines itself.

Major Support: $2.883, $2.78, $2.71-$2.70, $2.658, $2.52, $2.422-$2.414
Minor Support:$2.876, $2.694, $2.483, $2.162
Major Resistance: $2.98-$3.05, $3.12

Short Term Break Above

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Last week provided a brief break above the key $3.00 resistance area, only to find the sellers that have appeared on previous tests, which sent prices back to the middle of the previous range the Jun contract has provided us. The run did send prices to the highest price for a prompt contract since February 22nd. The close last week did not provide a closing break above the declining trend line from the Feb highs, but early trade on Sunday night has broken the aforementioned trend line.

Spot June Contract

Last I mentioned the upside momentum that June built coming off the April low(gains of .149, .064 and .113 in three of the weeks).  Last week, momentum seemed to be exhausted with a fourth straight gain of only .027 and those gains were associated with slightly lower volume (week over week).  Consolidation (.$30 gain) may be occurring in the June contract but I would of expected significantly lower volumes under that scenario.

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So Much For Those Ideas

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Prices got an immediate run on the storage release only to fail and retrace back into the comfort range of late. Well, I tried to promote the concept of $3+ prices but to no avail. The technical input suggests that prices will break above that area but, perhaps, the timing will be after the June prompt. History does suggest otherwise. The only problem with this range trade it is a dime in width where before it was $.20-$.25 and better for trading.

Support: $2.78, $2.71-$2.70, $2.658, $2.52, $2.422-$2.414
Minor Support:$2.876, $2.694, $2.483, $2.162
Major Resistance: $2.98-$3.05, $3.12
Minor Resistance:

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OK Something Maybe Forming

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Well, perhaps the market is starting to gather the fortitude to attack the $3.00 top end of the range as most of the other commodities have during the last month (some on numerous occasions). If gas does not garner the momentum to break above $3.00 it is miss a great chance to do so. From my trading perspective, I am not going to be selling at the resistance on the first opportunity and rather observe how the market behaves. We all know what will happen if the rally falls short again.

Support: $2.78, $2.71-$2.70, $2.658, $2.52, $2.422-$2.414
Minor Support:$2.876, $2.694, $2.483, $2.162
Major Resistance: $2.98-$3.05, $3.12
Minor Resistance:

Really

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Getting tired of this no trade – trade. May have to update in the future with oil, corn, soybeans or copper as they seem to be taking all the trade oxygen out of the markets. Will continue to update gas but feeling terrible about being uninformative to you folks who pay fees for basically the same analysis day after day. Stick with the ranges and hope Thursday will usher a change.

Support: $2.78, $2.71-$2.70, $2.658, $2.52, $2.422-$2.414
Minor Support:$2.876, $2.694, $2.483, $2.162
Major Resistance: $2.98-$3.05, $3.12
Minor Resistance:

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New Week — Nothing Changes

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Notice the red shaded area and you will observe the huge (tongue in cheek) volatility in the spot contract this month. Nothing changed yesterday either, so consider my thoughts and insights holding for today.

Support: $2.78, $2.71-$2.70, $2.658, $2.52, $2.422-$2.414
Minor Support:$2.876, $2.694, $2.483, $2.162
Major Resistance: $2.98-$3.05, $3.12
Minor Resistance:

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Rally Maintains Strength

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Weekly Continuous

Last week continued the consolidation process in a fairly tight range. It may turn out that the prompt June extends the rally toward the upper boundary of the developing triangle ( trend line declining from the October – November and February highs, the current value of which is 3.256 in the Daily Chart above). There is historical precedent for June extending the rally later during its tenure as prompt. In ’19 the high of June’s tenure as prompt didn’t trade until 05/20, in ’18 June’s high traded coincident with expiration. From a historical stand point — since 2007 prompt June has traded through the calendar April high in 12 of 14 years (the only exceptions were ’14 and ’19) . The first trading day of May this year made it 13 of 15.

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From Where Does the Break Occur

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To the up or to the down is the question natural gas has before because this range is going to break. Go into some of the historical trends for the June contract on the Weekly side — but it is starting to look to this trader that the prices are going to do both events (break down and break above) — but just not sure which is first. Don’t see the break down garnering enough momentum below $2.80 (see the expiration range on the May contract) and the break above is going to banging its head at several areas (discussed in Weekly) if it ever breaks above $3.00.

Support: $2.78, $2.71-$2.70, $2.658, $2.52, $2.422-$2.414
Minor Support:$2.876, $2.694, $2.483, $2.162
Major Resistance: $2.98-$3.05, $3.08, $3.12
Minor Resistance:

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Lower Volume, Low Volatility- HMM

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Not sure what to say here but prices seem to be consolidating in the $2.90’s instead of testing mid-term support for the base of the range. We shall see what happens as the month moves on but consistent below average volumes (comparatively) over the last four days and a volatility in range trade condensing, are not consistent technical indicators of a break down or a break out. From there come more consolidation until something happens to steer trader’s actions.

Support: $2.78, $2.71-$2.70, $2.658, $2.52, $2.422-$2.414
Minor Support:$2.876, $2.694, $2.483, $2.162
Major Resistance: $2.98-$3.05, $3.12
Minor Resistance:

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