The May Nymex contract soared to unprecedented heights onTuesday, thanks to an 11.3 cent surge that left the contract at$2.522. May posted a high of $2.53, which is a source said is thetop of a long term technical trading formation. The fact that Maysettled so close to that high price is a bullish sign, he said, andfor that reason, he believes May has a good shot at moving to itsnext resistance level of $2.58 when trading resumes today.

One floor trader asserted that funds are largely behind therecent futures strength. “Now that April is out they (funds) aretrying to take (May) for a run. Now I don’t know if May will be theone to take us all the way up but the summers are strong as an ox.When April got to $2.43, August went to $2.46. Then when April fellback down to $2.28 near its expiration August was still at $2.43.Nobody is giving up on the summers, nobody is throwing in thetowel. The forecasters have been dead on (with) their forecastsover the last 6 months, and if they continue to be right then thissummer will bring some strong demand for gas. With Palo Verdetrading at $46-47 right now why should gas still be trading downhere. Either power has to come off $15-20 or we have to come up.So, even if power comes off, gas doesn’t have to, so therisk-reward looks like it is definitely to the upside,” he said.

If May fails to move higher, look for initial support atyesterday’s failed resistance at $2.46, a technician said.

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