By Dean Rogers, GM & Senior Analyst, Kase and Company, Inc.
Natural gas entered into the injection season a bit earlier than normal, and as a result, prices have settled into a state of flux. It is too soon to say that a long-term bottom has been made, especially for the May contract. However, over the past few days the charts have shown that the upward correction is attempting to extend and that prices could soon rise to levels above $2.00.
May natural gas stalled just below crucial resistance at $2.02 Wednesday morning. This is the 0.618 projection for the wave $1.731 – 2.032 – 1.837. The $2.02 target is key resistance for the near term because a sustained close over this would call for at least $2.14 as the 1.00 projection. At that point, the move up would still be corrective longer term, but would most likely confirm that a bottom has been made through at least the summer months.
A normal pullback of the recent move up from $2.837 should hold $1.95. This is the 38 percent retracement from $1.837 to $2.015. However, the daily evening star setup that is formed on Wednesday indicates a pullback to $1.90 might take place. For the move up to continue, $1.90 must hold. This is the 62 percent retracement and the 0.618 projection of the wave $2.032 – 1.837 – 2.015. A close below $1.90 would shift odds in favor of a decline to $1.82 and lower.
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About The Author
Dean Rogers is the General Manager and Senior Analyst at the Kase Call Center. Dean began his career with Kase and Company, Inc. in early 2000 as a part-time programmer. Early in his career with Kase, Dean wrote programs and modules to help expedite and automate parts of Kase’s internal forecasting and hedging systems. He also worked extensively with the Kase StatWare® trading indicators. With this work, he quickly became passionate about the markets, and in particular, technical analysis. Dean’s new found market enthusiasm, along with his strong work ethic and dedication to Kase and its clients, resulted in him becoming Ms. Cynthia A. Kase’s protégé and ultimately her “right hand man”.
Dean oversees all of Kase’s day-to-day operations and writes Kase’s award winning weekly and quarterly crude oil and natural gas forecasts. He also teaches at Kase’s technical analysis and energy risk management courses, manages all programming and development, and collaborates closely with Ms. Kase in developing new software and carrying out quantitative analytics research.
Dean is a member of the Market Technicians Association, has been quoted in numerous publications including the Wall Street Journal®, Bloomberg® and Reuters® publications, and Black & Veatch’s® Cap Markets Report. He has also been published in Technical Analysis of Stocks and Commodities® magazine and contributed articles to various eSignal™ and Bloomberg® publications.