Following a three-day, 25-cent price spike, the natural gasmarket cooled its heels Thursday as traders took profits amidtechnically overbought conditions and ahead of the weekend. After alate morning push failed to surpass Wednesday’s $2.78 high, sellerscame out of the woodwork to deliver the March contract a dime lowerto $2.659.

“Storage was neutral to bullish and the market opened upstronger. Everyone I talked to figured [March futures] were headingto $3.00,” said a Chicago buyer. “I got caught in the herdmentality and ending up making my purchases on the high side[Thursday],” she lamented.

And while she contends that it was the futures screen that ledthe physical market lower, others disagreed, saying the softer cashmarket triggered the price avalanche yesterday. “All the stars havealigned the last couple weeks to get the [cash market] where we arenow. Once you lose any of these strength values (moderatingweather, etc.), the market will adjust back down. The screen oughtto be very cash-sensitive Friday,” a Houston risk manager said.

Cynthia Kase of New Mexico-based Kase and Company, takes a muchmore technical slant and believes the market’s inability to clearthe $2.78 level belies its strength. “My target was a $2.745 plusor minus 3 cents. Although we exceeded that by a half cent, themarket was still able to hold that level.” And because the marketopened and closed near its daily high Wednesday, it created ahanging man formation on the daily candlestick charts, which wasbearish, Kase continued. Now that the market has touched and movedoff her upside projection, she looks for prices to chop mostlysideways waiting for fresh weather news. “My big number on thedownside is $2.62, which is half the distance between Monday’s openand close of $2.575 and $2.662.”

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