Buoyed by cold weather expected to continue this week and comingon the heels of modest gains late last week, natural gas futuresshuffled higher late in the session Monday as traders took backearlier losses by pressing their long exposures. The April contractreceived the biggest buying boost, finishing 4.9 cents stronger at$5.322.

Traders in New York City were awakened to the sight of snowfallMonday morning and that, along with the short-term Northeastweather forecasts, which call for below normal temperatures thisweek, had them in a buying mode yesterday. According to theNational Weather Service, temperatures are not expected to climbabove 50 degrees in New York City until Friday at the earliest,with nighttime lows near freezing.

Also of impact was technical posturing following last week’simpressive rebound off of support at $5.00. Several traders polledby NGI Monday agreed that bulls were gunning for April’s 40-daymoving average ($5.358), which if surpassed, could fuel additionalbuying. It deserves mention here that prices spiked as April movedthrough another key moving average – the 18-day moving at $5.165 -last Tuesday. Needless to say, there exists a possibility thatApril futures could creep higher into expiration Wednesday.

Looking ahead, market watchers are still a little uneasy aboutthe May contract, however. While holding out the possibility of arebound to resistance at $5.66 and $6.00-22, Tim Evans of NewYork-based IFR Pegasus is cautious of May’s downside potential.”Fail to hold $5.24, however, and all of these higher levels arepostponed if not negated. Pressure would be placed on the $5.06 lowfrom Thursday and perhaps the $4.92 bottom from March 15….”

That said, the group looks to enter a 50% short position with a$5.22 sell-stop. If hit, they will use a $5.39 buy stop to limittheir risk.

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