NG May June July 2026 Butterfly

Overview

The May June July 2026 NG butterfly rose yesterday to its best value for the contracts. We believe that some of the strength seen in the wings---May and July--versus the body/June contract was a function of the index fund roll that was ongoing this week. The index fund roll saw March long contracts being sold to be rolled forward into longs in the May contract.

Technically the contract has 2 elements that make us believe that the butterfly is getting toppy. The butterfly settled yesterday/Thursday at 11.2 cents, which was one tic over the daily chart's upper bollinger band, thus creating a mean reversion setup. That band lies today at 11.8 cents, which says that a settlement below that band should see the butterfly lose some ground.
The other technical element we see that suggests that the butterfly has topped out is the momentum indicator is getting overbought and has the look of cresting, thus seems poised to turn downward.
In the prior 2 years, the butterfly peaked at 13.3 and 12.6 cents, but did not reach those highs until close to the expiration of the contract in April. But, given that the current butterfly has made a new high this week, we would peg possible resistance at the prior 2 years highs.
We see support below for the wings versus the June body in the current contract at 8.6/8.8 and then 7.6 cents.

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