Following a knee-jerk buying frenzy during Wednesday night’sAccess trading session, natural gas futures shuffled mostlysideways yesterday as traders continued to weigh the impact oftechnical factors and weather forecasts on the already inflatedprice level. Including Access, the November contract was up 8.6cents at $3.064 yesterday, 0.1 cent less than the opening price.
A Houston trader was impressed by the market’s ability to settleabove the $3.00 level. “$3.00 has been a tough level of resistance;many people feel it now will be a strong level of support.”Alternatively, other technicians contend that support now stands at$3.03, which corresponds to a prior high on the daily continuationchart.
However, a Chicago-area risk manager is starting to feel alittle uneasy about the current (high) price level. “This is allweather hype and if November rolls around and cold temps don’t showup, you can take a dollar out of this thing in a hurry.” In themeantime, he is sticking to spreads and thinks selling November andbuying December or January might make for a nice profit. “TheNov.-Jan. spread has narrowed down to 13 cents today. That is abargain. Just a few weeks ago it was trading as wide as 19 cents.”
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