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Futures Higher in Anticipation of & Reaction to AGA Data

Futures Higher in Anticipation of & Reaction to AGA Data

Warm temperatures in major eastern cities and apprehension about the possibility of "another bullish storage report" gave bulls the reason to buoy the market higher yesterday, and they did not squander the opportunity. Buying, led mainly by commercial traders, sent the July contract up to a retest of its previous open outcry session high of $2.41 before settling at $2.407. Estimated volume was 73,884.

By early yesterday evening it was apparent the bullish storage concerns were justified. The American Gas Association said that 71 Bcf was injected into the ground last week. For the second week in a row that figure fell short of market expectations and refill numbers from last week and last year of 73 and 106 Bcf respectively. There is 1,703 Bcf in underground storage facilities, only 36 Bcf more than last year at this time.

Looking ahead, New Mexico-based Kase and Company believes the choppy trading phase is over now that the market has broken out of its flag or pennant formation that has formed over the last month. Flags and pennants are chart formations that represent brief pauses in a market move, oftentimes in the opposite direction of the prevailing trend. Kase's upside target is $2.44, "with reasonable probabilities of extensions" to $2.50 and even the high $2.50's for July.

That bullish prediction was already being played out last night, when the July contract took out their first upside target of $2.44 early in Access trading.

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