Daily Call

Lets Go Top Side

Daily Continuous

The price action checked the low end of the mini-range and now seems to want to check the high side of resistance. Storage report will provide any stimulation that may be needed to move price beyond the range. Limit exposure until the release — unless you like rolling the dice.

Major Support: $2.97, $2.727, $2.648,
Minor Support :
Major Resistance: $3.628, $3.86, $4.168, $4.461, $4.501, $4.551, $4.746-$4.75, $5.03

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Can’t Say Much During This Range Period

Daily Continuous

Wish I had some key technical insight for this trade — but I really don’t as the market is just sloshing back and forth with in a rather tight range developed from expiration of the May contract. Patience and selling premium are my thoughts.

Major Support: $2.97, $2.727, $2.648,
Minor Support :
Major Resistance: $3.628, $3.86, $4.168, $4.461, $4.501, $4.551, $4.746-$4.75, $5.03

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Range Testing Continues

Daily Continuation

Not a lot to add to the heading as the market is testing and establishing a range for near term price action– would play the further sides of support or resistance to avoid being chopped by the potential action.

Major Support: $2.97, $2.727, $2.648,
Minor Support :
Major Resistance: $3.628, $3.86, $4.168, $4.461, $4.501, $4.551, $4.746-$4.75, $5.03

Does It Build or Consolidate

Weekly Continuation

Last week’s rally was not among the things was not my immediate expectation. My view was that new prompt May would forfeit its premium and prompt gas offered lower to test rising trend line support and that technical “damage” done by the precipitous decline during calendar April (from a high on 04/03 at $4.203 to a 4/24 low at $2.858) including a weekly close below the December and January lows ($2.977 – $2.990) would render a significant recovery problematic at best.

The caveat was that in addition to vulnerability flowing from the persistent liquidation of open interest, prompt gas was severely short – term oversold and was two standard deviations below the 20 – weeks SMA for the first time in more than a year. As it worked out those conditions trumped the downside momentum that had built with six of seven lower weekly closes since the March high (the only exception was week ending 03/28 when new prompt May gained $.041). The weekly gain was the second largest for a prompt contract in more than a year ($.518 v $.565 for week ending 03/07) as June traded through layers of defined resistance as handily as it had violated similar levels of support.

Volatility…which can be a hedgers best friend or worst nightmare, increased this week.

Given the elevated level of volatility and this week’s range traded of $.814 (including the gap) it would be reasonable to expect increased volume. That did not happen. Average daily volume fell more than 25,000 contracts and the lowest of the week accompanied Friday’s .151 gain and strong close. Open interest did increase for the first time in four weeks but only modestly…+/- 10,000 contracts. Those are not the characteristics of a sustainable rally.

The rapidity and magnitude of this week’s gain left little definable support, June’s April low ($3.007) and the calendar April low and the low of week ending 05/02 ($2.858 – $2.859), but there is a ton of identifiable resistance including the 20 – week SMA…which as of late prompt gas seems to swing to extremes around. The 20 – week is currently $3.732. A few weeks ago, the solution for dealing with a persistent elevated level of volatility (the weekly ATR is $.587 and has been $.50/dt/week or higher since the beginning of ‘25/. In early May ‘24 it was $.306),

Major Support: $2.97, $2.727, $2.648,
Minor Support :
Major Resistance: $3.628, $3.86, $4.168, $4.461, $4.501, $4.551, $4.746-$4.75, $5.03

Market Needs to Define

Daily Continuous

Market is challenging initial resistance areas which will help define the June prompt range. The moving average levels will be key in the move and breaks above may provide the momentum to move prices higher.

Major Support: $2.97, $2.727, $2.648,
Minor Support :
Major Resistance: $3.628, $3.86, $4.168, $4.461, $4.501, $4.551, $4.746-$4.75, $5.03

Storage Brings Upward Push to Initial Resistance

Daily Continuous

Guess the storage report provided some strength for prices as they rallied to intermediate resistance.The rally will need to take out the resistance and extend to the next level. Patience is the key during the next few weeks is you are a buyer or a seller. Was the April decline similar previous April break downs? Or are we headed to further tests of support? Would not put a lot of risk right here.

Major Support: $2.97, $2.727, $2.648,
Minor Support :
Major Resistance: $3.628, $3.86, $4.168, $4.461, $4.501, $4.551, $4.746-$4.75, $5.03

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Expiration Seemed Drain Momentum

Daily Continuation

The expiration of the May contract seemed drain any further positive momentum from the expiration and left the market with a tight range trade. This consolidation may take the rest of the week, but I would expect a market test of the support zone from the May expiration.

Major Support: $2.97, $2.727, $2.648,
Minor Support :
Major Resistance: $3.628, $3.86, $4.168, $4.461, $4.501, $4.551, $4.746-$4.75, $5.03

Didn’t Expect That

Daily Continuous

Did not see a $.20 rally in both the prompt and June contract on expiration. What does it mean? — still in the range that held through the end of April– so I would expect the range to remain intact. Then again I had no expectations of yesterday’s move. Was it short covering or new positions in — will evaluate that with the volume and open interest data today.

Major Support: $2.97, $2.727, $2.648,
Minor Support :
Major Resistance: $3.16, $3.628, $3.86, $4.168, $4.461, $4.501, $4.551, $4.746-$4.75, $5.03

Expiration Day

Daily Continuation

By now you should know my attitudes about trading on expiration day — I don’t. One thing I will be looking for is how the Jun contract trades relative to expiration. I am expecting weakness in the Jun contract early in it’s life, and to come back into the May expiration range.

Major Support: $2.97, $2.727, $2.648,
Minor Support :
Major Resistance: $3.16, $3.628, $3.86, $4.168, $4.461, $4.501, $4.551, $4.746-$4.75, $5.03

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Seasonal Tendencies Remain Intact

Weekly Continuation

After declining for the fourth consecutive week, the gas market is suddenly at least short – term oversold…both the daily RSI and MACD finished the week in their historical EXTREME zones and the weekly RSI is not far away. In addition, prompt gas which just seven weeks ago was extended nearly three standard deviations above its 20 – weeks SMA closed on Friday two standard deviations BELOW that important moving average. The last time prompt gas was there was during February ’24 during the construction of a multi – year low, from which prompt gas more than tripled.

This is hardly the first time that veterans have seen gas prices fall precipitously from a blow off high…2014 and 2018 are two of the more recent examples. Many times, the comments that “this time is different”, has been referred to here and in the Daily, but this time it does feel a little different to me. If for no other reason, prompt gas remains above clearly defined rising trend lines on the weekly and monthly charts. Those are the same two trend lines suggested here in late January/early February would be tested as gas traded down to a traditional late Q1/early Q2 low. While that did not happen, they are still there to be tested…and until they are decisively violated the uptrend from the above referenced multi – year low is still intact.

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