For the second week in a row, cooler temperatures and spikingcash prices piqued the attention of buyers Monday, prompting shortcovering amid some fresh buying. That enabled the prompt Januarycontract to gap higher on the open, and quickly move to majorresistance at $2.00. But the buying dried up and January was tradedmostly sideways before ticking down at the final bell. Januaryfinished at $1.952, up 9.4 cents for the day.

A New Jersey-based analyst was quick to point to January’sability to break out of an ascending triangle pattern to the upsideyesterday as a reason for its near-frictionless travel to $2.00.”What we saw [Monday] was a fundamental trigger that gave rise to atechnical rally,” he said, referring to stronger cash prices thatinitiated the futures move to $2.00. “However, this market is veryoverbought in the short-term. That, paired with cash prices thatare still trading at a hefty discount to futures, could make $2.00a tough obstacle for further gains,” he continued. NGI’s DailyHenry Hub index is $1.83.

The Pegasus Econometric Group agrees, and thinks that the priceaction this week could mimic the pattern seen last week. They lookfor any gains notched early in the week to be trimmed or reversedsharply Wednesday ahead of the American Gas Association StorageReport. “We anticipate another bearish report, with net withdrawalsof 10-40 Bcf still comparing unfavorably to the heavy 136 Bcfwithdrawal from a year ago,” the group wrote in its Natural GasReport Monday.

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