The April Nymex contract finally broke out of its recent tradingrange by falling a relatively large 8.7 cents to $2.141 onThursday. “Today was massive long liquidation by funds, coupledwith weaker cash prices,” a broker told NGI. “The market droppedbelow the magic 40-day moving average (at $2.205), and fell belowtrendline support at $2.19. Both those things triggered a series ofstop loss orders, which helped propel April even lower. April lookspretty negative on the charts. There was a lot of technical damagetoday. The market will most likely want to continue to test thedown side,” he said.
However, a marketer feels inherent fundamental strength in themarket will prevent April from falling too far. “LDCs continue tobe good buyers at the screen basis $2.10. That’s the number that’sin their budgets. Day to day spot prices may venture under thatnumber, but utilities would love to term up supply at that price,”he argued.
The aforementioned broker also feels April will likely see anupward correction. “Funds pushed the market on the way up, but notwith a blowup. They are also the ones who have pushed April down,do don’t expect a blowdown. We’ve had four down days in a row, andyou should have seen the big drop the first or second day. The factwe saw it on the fourth day suggests funds put in new shorts whichmay get covered [today],” he said.
If April does venture higher, look for resistance at yesterday’sfailed $2.19 support level, a technician said. He places supportfor April at $2.10.
©Copyright 1998 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press,Inc.
© 2023 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |