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Futures Bend But Refuse to Break
The May futures contract suffered a third straight day of lossesby slipping a mere 0.6-cents to settle at $2.469 in relativelyquiet trading. The session was marked by light selling as bearsprobed for sell-stops but was kept in check by buying ahead of the2.435-.440 level. A modest 31,695 contracts changed hands in asession that saw no new fundamental developments.
Sometimes a market that loses ground can actually send offbullish signals and that is just what several traders saw onMonday. “The market tried but failed to take out the $2.43 levelagain [Monday]. That now stands as a triple-bottom formed in thelast three trading sessions. It also is a 50% retracement fromMay’s recent low of 2.135 and high of 2.725. This market could beslowly gathering momentum for another upside push.” the Nymex localspeculated.
However, a broker says – not so fast. “Sure this thing lookspoised to bounce off support to move higher, but I wouldn’t bet onit. What this market needs in order to trend higher is some goodol’ fashion bullish fundamental news. Sure there is the hypesurrounding this summer, but that is still a long way away. Unlesswe get a boost from weather, storage or the physical market, Ican’t see this thing moving higher.”
Support exists at the aforementioned $2.43-.44 level with morecongestion in the 2.33 area. Resistance stands at $2.56, a chartistadvised.
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