Ending a two-week, $1.17 price slide, natural gas bulls clung to early gains Thursday despite a considerable push lower late in the session. With that the October contract concluded its first day as prompt contract with an unremarkable 0.2-cent gain to finish at $2.395.

For bulls, yesterday’s early morning advances were a welcome relief following a more than 34% retracement off mid-August spot highs. However, the rally proved to be short-lived when buyers ran into persistent overhead selling at Wednesday’s $2.52 high. Four hours and 16 cents lower, the market was nearing Wednesday’s $2.35 low.

With little in the way of fresh fundamental factors in which to sink their teeth Thursday, bulls and bears were forced to revert to technical features for the market’s next price move. For Cynthia Kase of New Mexico-based Kase and Company, October has immediate support at $2.38, which she believes will act as a pivot point for another push lower or a possible rebound. “If this market cannot produce a close below $2.38 for more than one or two sessions, it is a sign that the push lower is beginning to stall out.”

In part because the market has moved lower so quickly, Kase recognizes that any rebound could be just as compelling. Accordingly, she uses technical analysis to determine her test points for the move. “I don’t regard technical analysis as deterministic. You have to establish your test points and wait for the market to move though them. If you get through the first one, go on to the second.

“The first level you have to look at is the top of Monday’s chart gap up to $2.725, basis October. A break of that level could lead to a move to the $3.35 area. The next big number after that is $3.75, which represents 62% [Fibonacci] retracement of the move from the recent $4.61 high down to Wednesday’s $2.35 low,” she said.

Conversely, a series of settles beneath the aforementioned $2.38 level would give her a 50% confidence that a move to $1.88 is in the cards.

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