Ending a two-day slide, natural gas futures snapped back to lifeFriday as traders were drawn back to the long side of the market bysupportive technicals and stronger weekend cash prices. In just itssecond day as the prompt contract, May advanced 7.2 cents to finishat $2.945, just a penny off its high for the day and just 6 centsof its all-time high notched last Tuesday.

Friday’s activity, while heartwarming to those already long, wasa surprise to most traders, who thought the market would add toThursday’s losses. However, a chartist was quick to note thatdespite the bearish post-expiration tone, the May contract was ableto remain above a couple of key technical indicators. “Both cashand swing-swaps traded down to the low to mid $2.80s Thursday, butMay didn’t drop below its 10- or 20-day moving average. And once itwas clear that all the bearishness had already been factored intoprices, it was only natural for the market to move higher,” hesaid.

Another positive feature was cash prices, which trendedend-of-March levels Friday, despite the overwhelming perceptionheading into the day that the market was long physical supply forthe weekend. NGI’s Henry Hub index for weekend flow was $2.88, downa penny from the the first of month index.

However, other reasons for the market’s advance were subtler andharder to gauge. “[Friday] we saw some window dressing by fundtraders who drove natural gas prices higher, in an attempt to putthe best price on their first quarter books,” a Houston riskmanager said. “[Funds] are long, probably at an average cost ofsomewhere in the $2.40s or $2.50s and extra gains they can eke outon the last day of the quarter is pure gravy on a mark-to-marketbasis,” he reasoned.

In daily technicals, May has resistance at the aforementionedcontract high of $3.005 ahead of highs from the weekly continuationchart from August and October of $3.13 and $3.195 respectively.Support exists at the bottom of previously filled chart gap at$2.895 and then again at $2.84.

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