Feeding off positive momentum from Wednesday’s active tradingsession, natural gas futures trundled higher yesterday as tradersgauged the persistent issues of storage and weather. And while thatfollow-through was enough to boost the prompt January contract up7.4 cents to $2.064 for the day, 4 cents of that was notched in theWednesday night Access session, leaving some bulls to suggest thatyesterday’s movement was disappointing.
An East Coast trader said the market’s inability to fill in thehuge chart gap up to $2.19 again on Thursday was not a constructivedevelopment for bulls. “Each time the market tries to fill andfails, it only makes it harder the next time.” The January contractcould only muster a high of $2.08 yesterday.
But Sandy Trot, President of New York-based Trot TradingCorporation, disagrees and feels that the market could fill in thechart gap either today or early next week. “Every time this markethas hit a downdraft the sellers have run out of bullets and themarket has rebounded. What is positive about these moves lower isthat they are making higher lows. Add to that the island reversalpattern on the daily charts and the long side of this market looksvery tempting.” He warns that because of the choppy nature ofnatural gas lately, “longs must be a little nimble with theirpositions.”
The Pegasus Econometric Group has a more fundamental slant. “Themarket still has a choice in the near term whether to focus on thecomparison with expectations and the weather on the bullish end ofthe scale or the bearish storage overhand. Eventually we think theglut of storage will count for more.” The New York-based groupfavors a large sideways trading range between $1.79 and $2.12 inthe intermediate-term.
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