Expiration week is supposed to be about extreme volatility atthe New York Mercantile Exchange, but the March natural gascontract exhibited anything but that on Monday. The spot monthinched 1.9 cents lower to $2.179 yesterday, amid a session bound bya tight 4-cent trading range
The main reason why March was so stagnant is that there may notbe too many people left to trade the contract, a source told GPI.”You’ve already seen a lot of people get out of March. That’s whythe contract surged last week. Speculators who were short got outof their positions. Most of them are in April now, so it’s notlikely that March will move much between now and this Wednesday,when it goes off the board,” he said
One marketer thinks March may still have a little life left, butnot much. “I’d buy this thing at $2.14-15, but you really can’tmake much money here. Maybe a run to $2.22 or so, but there islikely to be good selling there. With double margins, it’s just notworth it to trade March right now,” he explained
However, he feels the overall bias for the outmonths is to theupside. ” There are still a lot of utility buyers who have $2.10less basis the screen as their minimum budget price. If April movesto that level, there will be some buying, that’s for sure,” hesaid. A broker also believes a fair number of standing buy ordersexists in the lower $2.10 area, so the (April) contract “ain’tgoing to fall below that anytime soon,” he predicted. If April doesventure higher, look for resistance at the $2.29-30 level, atechnician said
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