Natural Gas Forecast: June Challenges Support at $2.13

After breaking higher out of the recent trading range between nominally $1.96 and $2.13, June natural gas stalled at $2.304. This was just below important resistance at $2.33, which connects to $2.43.

Monday’s bearish engulfing line and confirmed divergence (purple down arrow on KaseX) called for a test of $2.13. This was strong resistance between March 18 and April 18 and has now become support. So far, this level has held on a closing basis.

NGM6 20160427
June natural gas

Tomorrow’s EIA Natural Gas Storage Report is expected to show around a +70 Bcf build. This is higher than the +52 Bcf five-year average, and could aid in dropping prices below $2.13 again. A sustained close below $2.13 would call for $2.03 and $1.96 where range bound trading may again ensue.

That said, the small move up from $2.108 late Wednesday may extend in early trading before the EIA report is released. Unless there is a much smaller than expected build reported by the EIA tomorrow, there is a cluster of resistance between $2.18 and $2.23 that should hold. A close over $2.23, the 62 percent retracement from $2.304 to $2.108, would call for $2.33 to be attempted again.

This is a brief natural gas forecast for the next day or so. Our weekly Natural Gas Commentary is a much more detailed and thorough analysis. If you are interested in learning more, please sign up for a complimentary four-week trial.

Published by

Dean Rogers, CMT

Dean Rogers, CMT is the general manager of the Kase Call Center in Albuquerque, New Mexico. He oversees all of Kase and Company, Inc.’s operations including research and development, marketing, and client support. Dean began his career with Kase in early 2001 as a programmer but has developed into Kase’s senior technical analyst. He writes Kase’s award-winning weekly Crude Oil, Natural Gas, and Metals Commentaries. He is an instructor at Kase's classes and webinars and provides all of the necessary training and support for Kase's hedging models and trading indicators for both retail and institutional traders.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.