Formed when one day’s high is lower than the next days’ low,chart gaps are a technical feature that garner plenty of marketattention. And the natural gas futures market has had more than itsshare of gaps during the month of April. There are theyet-to-be-filled daily continuation chart gaps at $2.90-92 and$3.03-045 as well as the $3.08-11 gap that was filled in by the Maycontract just prior to its expiry Wednesday. All told, May’s tenureas prompt month could be easily described as tight, choppytechnical trading. Only once during that period did May have adaily trading range that exceeded a dime (April 4).

With that said, it came as little surprise to most when the Junecontract debuted as the front month by gapping lower at the openand then trading within an extremely-tight 3.5-cent range — somuch for “out with the old and in with the new.” However, there isone notable distinction between the two months. While the Maycontract bubbled higher for much of the month of April, the Junecontract opened on a decidedly bearish note yesterday, shuffling3.5 cents lower to finish at $3.055.

Traders pointed to waning Northeast heating demand andanticipation of weekend cash softness as reasons for the pricedecay. But fundamental reasons are solely responsible for theselling that has trimmed nearly 14 cents off June’s highs from lastweek. “Technical factors are also at work here,” a Houston tradersaid. “This market just got a little overdone and needed to take abreather. Right now I am a bull with my horns turned in. I wouldfeel a whole lot more comfortable if this market would consolidateback down to $2.90.”

However, in the intermediate- to long-run he remains bullish andcites the potential for low nuclear utilization, a hot summer andthe increasing urgency to pack gas into storage for next winter.

In daily technicals, June has support at the bottom of theaforementioned chart gap down to $2.90. On the other hand,resistance stands at the top of yesterday’s $3.075-085 gap as wellas at prior highs of $3.19 and $3.195.

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