For the past week, the natural gas market’s minor trend is slightly up to neutral. Today’s price action should be ruled by the storage numbers. We are expected to get a build of 99 bcf as opposed to the 5-yr average of 94 bcf. The underground storage numbers totaled over 2500 bcf. which is about 10% above the 5-yr average too.
Weakness in the energy sector has dragged on natural gas prices this week, along with above average temperatures and forecasts for the weekend. Support for the July contract is down around 2.900.
Resistance near by is at 3.100 and further out slightly above 3.240. Our target range is somewhere in the middle near 3.166-3.175. Take caution for a retracement to the support numbers before another leg up. A close below 2.935 would be needed to negate the current minor trend and return to a bearish market. Buying puts or short contracts can be used to take advantage of the short side of the market, looking for a large infusion of gas. Tight stops should be placed in case of a smaller than expected storage number.
Jul ’17 Natural Gas Daily Chart