Daily Call

Bulls are Running

Weekly Continuation

For only the third time in the last thirteen years prompt gas traded through the February high during calendar March but as of yet the the prompt has not closed above that high. The other two years that met that condition were ’13 and ’17. In both of those years successive prompts built on gains before recording May – Q2 highs.

Volume and open interest increased along with price this week (a technical positive). Average daily volume was an estimated 60,000 contracts higher than last week’s lowest levels in nearly a year. Open interest increased a slight 4,000 contracts (from Thursday through Thursday, open interest statistics always lag by one day), leaving the total just above the early February low (the lowest total since the fall of ’16) and still below the level at the December price low.

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What a Trend

Daily Continuation

Thirteen consecutive runs during the expiration process– that said, mentioned in the Weekly section that due to the rally of last week, perhaps the run in the last two days may be more muted. The other side of that thought is the Feb expiration which rallied to over $7.00 after showing strength prior to that day. You know my thoughts (like to preserve capital), and will stay away from instituting new positions over the next two days,

Major Support:$4.40-$4.26, $4.187, $3.972, $3.734, $3.63, $3.584-$3.522
Minor Support: $5.08, $5.04, $4.88, $4.60-$4.557
Major Resistance: $5.33, $5.572, $5.65, $6.24

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13th Consecutive Rally into Monthly Expiration

Daily Continuation

This market may continue to rally through the next three days (expiration process) but it should be safe to say that the market continues the trend of rallying into the expiration for the 13th consecutive month. I would not expect the market to decline below the Friday close from last week at low from Friday last week below $5.00. How high can it go — unknown (just look at the Feb expiration)– as the market is just now starting veer into over bought conditions.

Major Support:$4.40-$4.26, $4.187, $3.972, $3.734, $3.63, $3.584-$3.522
Minor Support: $5.08, $5.04, $4.88, $4.60-$4.557
Major Resistance: $5.33, $5.572, $6.24

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Strong Gains Repelled

Daily Continuous

While the early strong gains were impressive, some bulls decided to take some profits in the move. Declines from the high were indicative but not conclusive that future gains will not occur as the those declines were slight compared to the weekly move. This week’s move over $5.00 needs to be confirmed that folks are comfortable over that level which should mean a test below and a consolidation around the key level.

Major Support:$4.40-$4.26, $4.187, $3.972, $3.734, $3.63, $3.584-$3.522
Minor Support: $5.08, $5.04, $4.88, $4.60-$4.557
Major Resistance: $5.18, $5.33

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A Close Above $5.00

Daily Contnuous

For the first time (after two attempts) since early Feb, the market closed above $5.00. The previous two strikes above that magic number were repelled during the daily trade. Now the market will have to confirm the move on even though yesterday’s run had stronger volume. It may be likely that the break above was met with some short covering so waiting a day or two for confirmation of additional gains may be prudent.

Major Support:$4.40-$4.26, $4.187, $3.972, $3.734, $3.63, $3.584-$3.522
Minor Support: $5.08, $5.04, $4.88, $4.60-$4.557
Major Resistance: $5.18

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Early Declines Find Buying

Daily Continuous

The early morning declines that took prices down to $4.747 before the buyers stepped in and moved prices back above $4.90. All of this happened on very light volume as the gains do not seem to be wide spread support for a launching for higher runs. With lack of volume traders need to be cautious in adding or starting to build positions. Fully expect prices to rise above the key $5.00 during the summer as some of the fundamental data comes evident, but the market action does not convince me that now is the time.

Major Support:$4.40-$4.26, $4.187, $3.972, $3.734, $3.63, $3.584-$3.522
Minor Support: $4.88, $4.60-$4.557
Major Resistance: $5.04, $5.08, $5.18

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Rejection At $5.00 — So Far

Daily Continuation

Price volatility settled back a little last week as the price range stayed within the previous week’s range. While challenging the $5.00 level, the move was rejected on Friday with the retreat to a higher weekly close. Would expect some correction before the market heads into the 13 month trend of higher expiration rallies. In the Weekly section of the web site I discuss the limitations of further declines in the coming couple of months.

Major Support:$4.40-$4.26, $4.187, $3.972, $3.734, $3.63, $3.584-$3.522
Minor Support: $4.88, $4.60-$4.557
Major Resistance: $5.04, $5.08, $5.18

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Inside Week

Weekly Continuous

Following the tests of support on Monday and Tuesday April rallied to test the resistance beginning at $5 before fading into the weekly close. Despite reasonably serious challenges to both, neither the high nor the low of last week was violated. Accordingly, April traded an “inside” week, but with the close in the upper quadrant of this week’s range suggests that the resistance presented by multiple weekly highs will continue to be tested.

In addition to last week’s modest tightening of the range traded, the ongoing consolidation by prompt gas has been accompanied by a reduction in the average daily volume. Open interested increased, slightly, this week but remains below the December low. Volume, an estimated 1,250,000 contracts this week, was the lowest in nearly a year dating back to the week ending 04/02/21 (including weeks with only four trading days).

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Is It a Higher Weekly High

Daily Continuation

Prices continued there gains and the volume each day this week has been a little stronger than the previous day but the total for the week is lagging from the previous week. Will the price action find the additional footing to set a higher high compared to last week– not sure. When I hear from the fundamental folks these prices are a combination of the conflict and the change in demand in the forecasts– I am more confused as ever for additional gains to set a higher high — perhaps it comes in the middle of the night (similar to last week) in very light trade.

Major Support:$4.40-$4.26, $4.187, $3.972, $3.734, $3.63, $3.584-$3.522
Minor Support: $4.88, $4.60-$4.557
Major Resistance: $5.04, $5.08, $5.18

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Bounce to High End of Mini-Range

Daily Continuous

So far this week prices have stayed within the range of last week neither breaking below the lows nor above the highs of the previous week. That can be defined as a consolidation trade range waiting for the next piece of information to perhaps break down or out.

Major Support:$4.40-$4.26, $4.187, $3.972, $3.734, $3.63, $3.584-$3.522
Minor Support: $4.60-$4.557
Major Resistance: $4.82-$4.88, $5.08

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