The June Nymex contract made it 2 for 2 for up days this week,as the spot month gained another 4.1 cents to settle Tuesday at$2.256. Sources said the market followed cash prices higher butalso warmed further gains may be limited. “This is the fifth timeJune has failed to rise above $2.27. Moreover, the daily lows havebeen rising also, so sooner or later something’s going to have togive,” an analyst told GPI.
Another source believes that resistance level is keeping quite afew speculators on the sidelines. “For the last four or five weeks,the market has fallen pretty substantially after each AGA report.What day trader is going to want to get too long above $2.27, ifprices have a great chance of falling before that. I think you aregoing to see a whole lot of buying going on once prices rise abovethat level. But it’s going to take a storage report much lower thanlast year’s (which was 70 Bcf worth of injections), and thus muchlower than expectations, to eat into the storage surplus and getprices to rise,” he said.
If June does rise above $2.27, “fairly strong resistance” existsat $2.35, a technician said. He places support for June at $2.15,followed by major support at $2.11.
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