Thursday, September 20, 2012

Ahead of Today's Storage Report Kase Comments on Natural Gas

Something I don't have the guts to do.
The futures are up 3.6 cents at $2.798.
From the CME:
October natural gas met confluent support at $2.737 on Tuesday. In addition to being a highly confluent wave target, $2.737 is also in line with the $2.736 midpoint of September 10th’s candlestick. The recent move down from $3.07 is somewhat looks exhausted and it is likely that a correction to $2.87 and even $2.94 will take place before key lower support at $2.66 is met.

That said, the subsequent rise from $2.737 to $2.855 on Wednesday failed to close over the $2.82 midpoint of Tuesday’s candlestick to form a bullish piercing pattern. The failure to close over $2.82 is negative, but a bullish morning star setup is now in place.

Look for prices to hold support at $2.66 and test at least $2.82 and more likely $2.87 tomorrow. A close over $2.87 would then call for $2.94, which should hold. It is very likely that over the next few October prices will begin to settle into a trading range.

The 38% retracement from $3.07 to $2.737 is near $2.87. A minimal correction of the move down should hold $2.87, but an extended correction could push prices to the 62% retracement at $2.94. The $2.94 level is expected to hold....MORE
Not that it matters but we're looking for injections of 62Bcf vs. same week 2011 89 Bcf.