Natural Gas Negative Ahead of EIA Storage Report

For several weeks $2.79 was major support for natural gas. This level was tested many times, and was finally broken after last week’s bearish U.S. Energy Information Administration (EIA) Natural Gas Weekly Update.

Subsequently, prices have fallen to a $2.608 contract low, and $2.79 has become near-term resistance. The $2.79 level is the completion point for a bullish morning star setup, and was tested on Tuesday when prices rose to $2.783. This level is expected to hold for at least the next few days.


As of this analysis, Wednesday’s decline has setup a pseudo bearish engulfing line. The bearish engulfing line and other technical factors indicate another bearish EIA number may be expected tomorrow.

Trading will likely be extremely choppy over the next few days, but look for $2.79 to hold and for prices to challenge the $2.608 swing low. Ultimately, the decline is expected to extend to the next major target and bearish decision point at $2.52.

Conversely, a close over $2.79 in the next few days would complete the bullish morning star setup and open the way for an extended correction to the $2.852 confirmation point.

For more information about Kase StatWare please visit the Trading Indicators Page. To take a free trial of Kase’s weekly energy forecasts please visit the Energy Price Forecasts Page.

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.

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