After a tumultuous morning rally and retreat, natural gas pickedits way higher yesterday as traders looked past a mixed technicalpicture to focus instead on the possible reemergence of seasonaltemperatures by week’s end. The April contract advanced 2.5 centsto $2.85. However, the real stories were in the out months, whichgalloped higher to post gains of 3.4 cents and 3.5 cents for thesummer and 12-month strips respectively.

A Dallas based-trader remained bullish despite what she referredto as a mixed technical outlook. “The weekly charts are looking up,but according to the daily chart we could come off a little here,possibly to the $2.70-75 area,” she said, adding that 18-dayBollinger band resistance at $2.867 lines up neatly with April’slife-of-contract high from last week of $2.865.

The strongest vote of confidence yesterday came in the form of anew six- to 10-day weather forecast, which predicts temperatureswill moderate back down to normal for much of the U.S. According tothe National Weather Service, more than half of the countryincluding the West Coast, upper plains, Midwest, Great Lakes, OhioRiver Valley, Mississippi River Valley and Northeast are expectedto see normal temperatures by early next week. And while “normal”for mid-March doesn’t necessarily constitute a supply-demandemergency, it does come in sharp contrast to the above- andmuch-above normal readings experienced since mid-February, tradersagreed.

Alternatively, Cynthia Kase of New Mexico-based Kase and Companyremains bullish for purely technical reasons and cites the market’sability to move above a pennant formation on the perpetual charts.

“The market has finally broken out of the miserable ambiguouspattern that it was caught in for some five weeks, she wrote inGasFax dated March 6, 2000. Kase believes the environment is ripefor at least one correction to the $2.66 level, but feels that oncethat retracement runs its course, the prompt April contract couldbe primed for a run to $3.10 level.

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