In what may turn out to be a Pyrrhic victory, bulls weresuccessful on two fronts Friday — testing resistance at $3.00 andposting a gain for the third straight session. However, thoseachievements may have come at a price because even dyed in the woolbulls were shaking their heads after watching heavy selling enterthe market once prices reached over the $3.00 mark.

Lagging slightly behind gains seen in the out-months, the Maycontract finished up 1.5 cents at $2.971. Estimated volume wasstrong with 68,192 contracts changing hands.

Sources said May’s new life-of-contract high at $3.015 waspossible through a combination of marketer and local buying early,mixed with light buy-stop-loss trading once prices surpassed $3.00.While impressed with that well-rounded buying, Ed Kennedy ofMiami-based Pioneer Futures said the market is beginning to act alittle sluggish. “We saw scale up selling [Friday] by producerseager to lock in these prices. The market might make anotherattempt at the $3.00 level Monday, but I’d be a seller up heretoo,” he said.

Susannah Hardesty of Indiana-based Energy Research and Tradingshares Kennedy’s bearish sentiment, and warns her customers to beready for a short-term downside move. “The downside target rangefor the May contract is between $2.65 and $2.30, and at this time,our best estimate for the downside correction is between $2.65 and$2.475,” she wrote in her April 6 Natural Gas Weekly Report.

“The natural gas market continues to defy gravity,” adds TimEvans of New York-based Pegasus. “The market does carry a 306 Bcfdeficit relative to its storage level of a year ago as a focalpoint of concern, but the 1,031 Bcf on hand is not anythingremarkable for this time of year. In fact, it represents a 67 Bcfsurplus to the average of the past six years for which data isavailable… Nor does the current weather outlook seem to reflectany abnormal level of demand. The bulls continually promise futuredemand or a shortfall in refills, but like trading in Internetstocks, at some point there will be consequences for being unableto deliver some actual supportive fundamental news,” he said.

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