After gapping higher on the open for the third straight session,natural gas futures struggled sideways Thursday as bulls cooledtheir heels following a 7-day, 25% price rally. That choppy tradingactivity, along with an early foray into negative territory wereenough to fill in yesterday’s chart gap and prompting severaltraders to look for profit taking today.

Continued strength in the Wednesday evening Access tradingsession and supportive weather forecasts issued by both private andgovernmental weather forecasting agencies contributed to the pricesincreases yesterday. While each weather forecast tells a slightlydifferent story, nearly all of them call for a troughing jet streamthis winter, which could bring cold Arctic air into the lower 48states. In contrast, the last few winters have been marked by azonal jet stream, which keeps cool air up in Canada.

In daily technicals December has support at its 40-day movingaverage at $5.226. A break of that level could send pricesspiraling down to fill in the Tues-Wed. chart gap down to $5.10.Lower still, the Mon-Tues. chart gap at $4.97-98 could figure intosellers’ plans. Because prices were unable to break outside of therange set during the first hour of trading Thursday, it completed aneutral day on the daily chart, leaving open the possibility fortraders to test the downside today. For that to happen, explainsone local trader, the December contract would have to develop below$5.42. “I am not ready to short this thing quite yet, but if we tryand retest [Thursday’s] $5.55 high and then trade back into the midto low $5.40s, this thing could chop lower.”

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