The April Nymex contract fell 2.9 cents to $2.292 on Monday,following the spot month’s failed attempt to clear a majorresistance level. “April was in a two hurdle race today, but ittripped on the second hurdle,” a trader told GPI. “On the one hand,April was able to break out of the symmetrical triangle formationby moving above $2.34. However, April immediately fell back once itfilled in the chart gap at $2.355. There were quite a few standingsell orders at that price, so it’s no wonder the contract fellback,” he said.
“It’ll be interesting to see how many sell order will be aroundthe second time April challenges $2.355, and I think it will. Aprilonly fell to $2.27, meaning the contract didn’t break out of thetriangle to the downside. Plus, the contract didn’t settle near itslow, which would have been a bullish sign,” the trader said.
According to a Midwest marketer, physical prices are showing”surprising” strength. “There was some really strong cash marketbuying today. Cold temperatures are coming, sure, but we were ableto do some longer term baseload stuff at a constant basis of +6.5to +7. When the basis remains consistent like that, it’s a goodsign the cash market is believing the strength,” he said.
If April is able to break above resistance at $2.355, look forspeculators to drive the contract up to $2.40, with a secondarytest of $2.43, a chartist said.
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