Daily Call

Down– But Out???

Weekly Continuation

Since closing at $3.473 two weeks ago (the second highest weekly close of 2023) prompt gas has given up $.513/dt on a weekly closing basis. The rally from the March low to the October high ($3.630) has been retraced by a little over the 38.2% (Fibonacci retracement–technical level) but prompt gas remains above the intermediate term uptrend defining trend line rising from the April – May lows (Chart above). This trend line has been tested several times since the spring low. I would allow this as a pretty normal correction– 50% retracement of the rally is $2.787, which happens to be almost exactly the price needed to close the “expiration gap” left on 09/28 (natural gas abhors a vacuum). Prices declining will once again test the rising trend line (on a daily continuation basis the value of that trend line begins the week at $2.807) then test the 20 – week SMA (currently $2.832).

Technical thinking was that December would retreat to test support at the double bottom left on 10/03 and 10/23 (twin weekly lows at $3.216), the lower boundary of an orderly trading range. Indicators did not expect the gap lower on 11/06, a gap that remains open and confirms an RSI bearish momentum divergence. The combination of those technical factors suggests declines have not concluded.

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Storage Report Brought Volatility

Daily Continuous

Expected the potential for volatility but a $.238 range yesterday seemed a little over done. Regardless, prices now have to deal with the key $3.00 area that was rebuked last week at the 50 day SMA. So here we sit — if you a bullish bias trader, then buying on this decline with a stop just below the key support zoned makes for a low risk trade. If you are a bearish bias the you need to see a close below the key area to add to positions.

Major Support: $2.98-$3.03, $2.82-$2.78, $2.74, $2.608, $2.47, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $3.16, $2.84, $2.38-$2.26, $2.17
Major Resistance $3.48, $3.536, 3.59, $3.65

Storage Report Brings Implications

Daily Continuous

Not sure what the release will show but taking into the fact that it reflects two weeks of activity — the potential for volatility is high. The market, though, continues to reflect a consolidation phase type of behavior. If the previous months are any indication the range developing will have $3.00 as the low end and the highs of $3.64 finding sellers. Plan accordingly.

Major Support: $2.98-$3.03, $2.82-$2.78, $2.74, $2.608, $2.47, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $3.16, $2.84, $2.38-$2.26, $2.17
Major Resistance $3.48, $3.536, 3.59, $3.65

Consolidation of Recent Gains and Declines

Daily Continuous

Last week’s declines met with early gains this week — its not surprising that the market is going to consolidate and figure out its next directional bias (if only for a day or two). Developing a nice trading range that could provide $.25-$40 volatility in both directions.

Major Support: $2.98-$3.03, $2.82-$2.78, $2.74, $2.608, $2.47, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $3.16, $2.84, $2.38-$2.26, $2.17
Major Resistance $3.48, $3.536, 3.59, $3.65

Expected Run Now What

Daily Continuous

That didn’t take long for prices to rally, as discussed yesterday, and the run took prices up to low resistance zones. We shall see how far this rally goes and yes, the forecasts will have a lot to do with the run extension. I will stick with the technical data points and will trade accordingly with an eye to some forecasts defining sudden moves.

Major Support: $2.98-$3.03, $2.82-$2.78, $2.74, $2.608, $2.47, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $3.16, $2.84, $2.38-$2.26, $2.17
Major Resistance $3.48, $3.536, 3.59, $3.65

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Doesn’t Get More Bearish

Weekly Continuous

Lets look at the technical side of trade last week– Lower low testing major support (holds for now) on increasing volume and increasing open interest. That sounds like a market that wants to decline further. The big area is the support zone where trade left last week at $3.00 should it hold then prices may rebound to test breakdown areas at $3.16, $3.25, and $3.32. Further declines will send prices back to the range trade of the late summer ($2.80-$2.64).

Last week’s action was off of bearish weather reports for November but I am not convinced they can get any more bearish and it is likely that weather will change. The bearish start to Q4 prices reminds my of a couple of years ago — but I have to look them up to comment. In the meantime — wanted to have you look at something I wrote to a client last week..

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Major Support Holds– For Now

Daily Continuous

Prices closed below the trend line off of the Sept / Oct lows and are now challenging the major support zone around $3.00. Guess December is going to be warm and the Thanksgiving parade will be in shorts. No clue but this decline will end and the late comers will be gutted unless Dec is warm and comfy.

Major Support: $2.98-$3.03, $2.82-$2.78, $2.74, $2.608, $2.47, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $3.16, $2.84, $2.38-$2.26, $2.17
Major Resistance $3.48, $3.536, 3.59, $3.65

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Declines Continue to Define Low Range

Daily Continuous

The declines continued and now seem to want to test the $3.00 zone and then perhaps lower. No storage report to bring volatility to prices so would continue to buy support and keep the stops tight (around $3.00).

Major Support: $2.98-$3.03, $2.82-$2.78, $2.74, $2.608, $2.47, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $2.84, $2.38-$2.26, $2.17
Major Resistance $3.16, $3.48, $3.536, 3.59, $3.65

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A Dip Into Strong Support

Daily Continuous

A move early in the day took prices down below the expiration of Nov to $3.099. That low did not get tested again during the day. Price action seems to be a result of winter not arriving and folks are loading up the shorts with expectations of additional declines. Have seen this type of action on weather forecasts early in the season and have watched the covering when forecasts change.

Major Support: $2.98-$3.03, $2.82-$2.78, $2.74, $2.608, $2.47, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $3.16, $2.84, $2.38-$2.26, $2.17
Major Resistance $3.48, $3.536, 3.59, $3.65

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New Gap Above

Daily Continuous

The decline yesterday was significant and some what expected as prices had raced off of the new prompt strength. Challenging support now the action has left a new gap on the Daily chart above which will likely act as a magnet for price action in the coming days. Currently prices are about in the middle of the range of action on the continuous chart between $2.98–$3.64. Time to sit back and observe — no need to trade every day.

Major Support: $3.25, $2.98-$3.03, $2.82-$2.78, $2.74, $2.608, $2.47, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $3.16, $2.84, $2.38-$2.26, $2.17
Major Resistance $3.48, $3.536, 3.59, $3.65

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