Daily Call

Seasonal History Remains

Weekly Continuation

Soon to expire June extended its rally to test the continuation 20 – weeks SMA (and its own 20 – weeks average) before reversing lower from an historically consistent mid – May pre Memorial Day high. In eight of the last ten years that short – term seasonal high traded between the 12th and 23rd. Last year the pre – holiday high printed on the 12th (Memorial Day was the 26th) this year on the 20th (Memorial Day is on the 25th. A lower weekly close…after opening above last week’s high ($2.994 v $2.982) with a volume increase (average daily volume increased nearly 70,000 contracts) and a closing short – term uptrend violation indicates that prompt gas will be offered lower before going off the board on Wednesday. Following June expiration the new prompt almost always falls toward a late May/early June low before a rally (which more often than not peaks either side of 06/15 and can be, historically, more often than not the Q2 high.

There is little reason not to believe that prompt gas is likely to continue to adhere to seasonal patterns/tendencies as it has since the blowoff into February expiration. It has been suggested that gas is in the process of constructing a trading range between +/- $2.50 and $3.25 – $3.50 and may continue for much of the remainder of ’26. Gas may test either side of that range while premiums awarded to deferred and distant deferred contracts diminish.

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Same Range But??

Daily Continuous

As discussed in the Weekly section earlier this week, the historical trend of weakness around the holiday may effect the trade today.

Major Support: $2.640-$2.57
Minor Support/Resistance : $2.87-$2.84, $3.16-$3.148, $3.136, $3.02-$2.97
Major Resistance: $3.35, $3.486-$3.494, $3.567, $ 3.736

Resistance as Support Holds

Daily Continuation

As prices rallied through resistance at $3.00 — it is very common for that resistance to hold prices as support. Now we will have to watch how prices behave at testing it in the future.

Major Support: $2.640-$2.57
Minor Support/Resistance : $2.87-$2.84, $3.16-$3.148, $3.136, $3.02-$2.97
Major Resistance: $3.35, $3.486-$3.494, $3.567, $ 3.736

Slowly Pushing North

Daily Continuous

Small gains continue as prices worked higher during the day. Recall what was discussed yesterday and in the Weekly regarding the seasonal trends around the Memorial Day holiday.

Major Support: $2.640-$2.57
Minor Support/Resistance : $2.87-$2.84, $3.16-$3.148, $3.136, $3.02-$2.97
Major Resistance: $3.35, $3.486-$3.494, $3.567, $ 3.736

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Sunday Night Rally Holds

Daily Continuous

Prices held and continued to gain on the late Sunday night trade. Bouncing above $3.00 may end up being a key break through resistance as prices are headed into a historical weak seasonal price period as discussed in the Weekly section yesterday.

Major Support: $2.640-$2.57
Minor Support/Resistance : $2.87-$2.84, $3.16-$3.148, $3.136, $3.02-$2.97
Major Resistance: $3.35, $3.486-$3.494, $3.567, $ 3.736

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Bias Change Receives Some Confirmation

Weekly Continuation

Trade during May is an example of a price supportive seasonality that historically emerges during Q2. Prompt gas had closed above the April high during May in 16 of 20 years. On a continuation basis prompt gas closed below its 50 – day SMA every day since 01/29 (the first day of March’s tenure as prompt)…until Monday 05/11. On Friday the June contract followed suit, closing above its 50 – day for the first time since 03/12.

Although occasionally June rallies into expiration (’18 & ’22), typically during May the prompt trades to a mid – month, pre Memorial Day high. In eight of the last ten years that short – term seasonal high traded between the 12th and 23rd, before a decline through the holiday to an end of May – first week of June low. A year ago the May high traded on 05/12, the post – Memorial Day low was a little earlier than usual, on 05/28 (Memorial Day was the 26th).

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Building Momentum

Daily Continuation

What started a couple of weeks ago, prices continued to strengthen last week and seem to be building momentum into the seasonal rally during Q2. The historical price action up to and after the Memorial Day holiday has to be respected (outlined in the Weekly section). Caution should be used during and building on the seasonal rally.

Major Support: $2.640-$2.57
Minor Support/Resistance : $2.87-$2.84, $3.16-$3.148, $3.136, $3.02-$2.97
Major Resistance: $3.35, $3.486-$3.494, $3.567, $ 3.736

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Storage Report — Little Effect

Daily Continuous

Report came in close to expectations and had little effect on directional bias. Still with in the range of late, prices have not pressed upon support and remains at the high end of the range. Patience continues to be the key.

Major Support: $2.640-$2.57
Minor Support/Resistance : $2.87-$2.84, $3.16-$3.148, $3.136, $3.02-$2.97
Major Resistance: $3.35, $3.486-$3.494, $3.567, $ 3.736

Small Correction

Daily Continuous

Prices weakened some what and close just on the 50 day SMA mentioned yesterday–Be patient here to see if there is going to be additional selling.

Major Support: $2.640-$2.57
Minor Support/Resistance : $2.87-$2.84, $3.16-$3.148, $3.136, $3.02-$2.97
Major Resistance: $3.35, $3.486-$3.494, $3.567, $ 3.736

Prices Break Above 50 Day SMA

Daily Continuation

Not since February has the price broken above and closed above the 50 day SMA. While clearly, bullish in bias I will wait until a confirmation of the gains during this week. Tests and closes above $3.00 will confirm the break out– should prices retrace and fail at this resistance watch for the higher low discussed here for a couple of weeks.

Major Support: $2.640-$2.57
Minor Support/Resistance : $2.87-$2.84, $3.16-$3.148, $3.136, $3.02-$2.97
Major Resistance: $3.35, $3.486-$3.494, $3.567, $ 3.736

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