Following on the heels of a two-day, 44-cent price rally,natural gas futures continued higher as bullish technical andfundamental clues put traders in the buying mode early yesterday.However, after peaking at $4.29 shortly after 11:00 p.m (EST), theSeptember contract chopped lower throughout the afternoon to settleat $4.25.

“Bulls were looking for another gift,” said an incredulousHouston trader. “Tuesday there was the storm-hype, and [Wednesday]there was storage. When no new bullish fundamental news arrived,people took profits.”

However, one broker was quick to discount the bullishness of thestorm, the storage report and the market’s reaction. “The storm wasreally nothing, but because it was the first of the season itreceived a lot of attention. As for the storage, it wasn’t thatbullish either. What we saw [Wednesday] was a case of illiquidityright after the report was released. Everyone pulls their limitorders right before the 2 p.m. which gives the market frictionlesstravel in the direction that the market moves immediately after thereport is released.”

In daily technicals September has support first at Thursday’s$4.18 low and then again at $4.09, which was the 60-minuteintra-day high on Wednesday the hour before storage was released,the broker said. On the upside, he looks for selling at FibbonacciResistance on a 75% retracement of the recent move from $4.62 downto $3.62.

In after-hours trading, September dropped 5 cents to $4.20.

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