Natural gas futures closed slightly higher Tuesday as traders were content to remain on the sidelines and avoid the free-falling petroleum and equity markets. June natural gas futures rose 1.3 cents to $4.013 and July added a meager 0.4 cents to $4.133. June crude oil tumbled $3.45 to $82.74, and the Dow Jones Industrial Average spiraled lower 225 points to 10,926 largely on debt concerns in Greece.

“The market is rangebound just like it was last month,” said John Woods, senior trader at McNamara Options LLC in New York. Although many traders see the market as putting in a bottom and ripe for an advance, Woods is more cautious. “You want to see at least a couple of settlements two days in a row in the $4.20s and to really facilitate a bull move you have got to get this market above $4.33 and settling there. We traded up to $4.38 last Thursday and it just collapsed from there.

“On a Thursday [storage] report if you get a not-so-crazy number that catches a few traders by surprise and the market trades up, I think many would be inclined to sell it,” he added.

Prior to last Thursday’s 36.8-cent dump by the June futures, traders concerned with the directional nature of the market and not attempting to offset a physical position were aggressively shedding short positions and adding length, according to data from the Commodity Futures Trading Commission. In its weekly Commitments of Traders report for the five days ending April 27, the “managed money” component of the open interest in natural gas futures and options added long positions and liquidated short holdings.

At the IntercontinentalExchange (ICE) long positions (2,500 MMBtu) rose 11,983 contracts to 509,681 and shorts increased by 1,057 to 49,922. At the New York Mercantile Exchange longs (10,000 MMBtu) rose by 6,061 to 162,122 and short contracts fell by 16,253 to 232,892. When adjusted for contract size total long contracts (10,000 MMBtu) rose by 9,056, and short holdings fell by 15,989 contracts. For the five trading days ended April 27, May futures rose 24.1 cents to $4.216.

Market technicians see that the longer the current trading range remains in effect, the technical environment will favor the bullish cause. “Bullish case: $3.810-4.386 was only the ‘A’ leg up in a larger degree ABC advance. Bearish case: $4.386-3.885 was only the wave one down in a five-wave decline,” said Brian LaRose, an analyst with United-ICAP.

In his view seasonality may be on the side of the bears, “but time favors the bulls. The longer we sit, the less the price action will resemble a subdividing five-wave decline. Bears need a quick decisive close below $3.895 to keep their case alive,” he said.

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