Feeding off strength from Tuesday’s Access session gains, theMay contract was fast out of the chute Wednesday, quickly notchinga $2.08 shortly before noon. But for the fourth time in the lastfive trading days, resistance at the $2.07-09 level held andprofit-taking in the form of selling became the theme of theafternoon. The May contract finished at $2.024, just 1.1 cents morethan Tuesday’s close.

Traders agreed the market continues to be technically driven asevidenced by the low end of yesterday’s range, which was etched inthe last hour of trading. “This market has come off its high andnow looks poised to punch through the $2.00 level for a retest ofthe $1.99,” a Chicago trader predicted yesterday afternoon. Hiswords were prophetic because shortly after that the $1.99 level wastested but held as the low for the day.

Although many traders looked past fundamental features in theopen outcry session yesterday, few were able to ignore the impactof a 2 Bcf storage injection for last week estimated by theAmerican Gas Association. Pre-report speculation generally centeredon a small net withdrawal; however, one industry report straddledthe fence by calling for either a small injection or withdrawal.Tom Saal of Miami-based Pioneer Futures was somewhat surprised bythe net refill for the week, but maintains that the next week’sreport will be more critical because it will be the first full weekof injections.

Until that time, Saal feels it is more appropriate to look atwhat the market didn’t do. “We tested support below $2.00 againtoday but there was no follow-through selling. Now the market ispositioned to test the upside again.” He thinks the first test willcome at Wednesday’s high of $2.08, which will be little more than aspeed bump to traders looking to fill the $2.11-19 chart gap on thecontinuation chart dating back to November. The vehicle for thisrally? “Aggressive buying above the market by fund groups, who arealready long,” Saal said.

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