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November 16, 2001 . .

PLAY THE LONG SIDE, TRADER SAYS . . .

 Natural gas futures scooted higher in active trading Friday on the New York Mercantile Exchange. Prices opened lower but modest buying by fund and managed accounts was more than enough to whet the appetite of local and short term traders anxious to ferret out buy stops above the market. Cold
weather is expected next week, and traders are tempted to push prices still
higher. . .

 At the end of the day the December futures recovered some of Thurdsay's losses and added $.086 to $2.637 per MMBtu, and the January rose $.083 to $2.850 per MMBtu. . .

 "Early on there was good fund buying in the $2.52 to $2.53 area. I think they are getting a little long. There was not a great deal of fund buying but some," said a New York floor trader. . .

 "The locals were actively bidding prices higher in an attempt to trigger
some buy stops. Once prices rose above yesterday's high of $2.59, it was
clear sailing for higher prices and the locals could buy dips and play it
from the long side," he said. . .

 "We had a warm snap in the East and now it's supposed to get cold, so I
think they (locals) are preparing themselves to push prices higher," he said. . .

 "$2.70 is their target." . .

 Longer term traders are positive. . .

 "I'm bullish," says John Beaver, President Private Futures Group, Oklahoma
City. . .

 "I believe that $2.40 to $2.50 is as low as prices will go on the December
contract. January or February are the most attractive months to be long.
It looks to me that we're in the beginnings of an uptrend. The news to support it hasn't gotten here yet, but it will," he suggested. . .

 "Lower rig counts, higher industrial demand will push prices higher. I
would buy the futures and set a stop (loss order) at whatever threshold of
pain you can stand. I recommend $2.25 on the December contract," he said. . .

 "On the weekly chart the low of the week of September 28 ($1.76) is the low price of this cycle. The out month bull spreads, December June, January July,
didn't fall that much during this last price decline so that's a sign to me of commercial buying."


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Bill Burson
120 Summit Blvd.
Englewood, Colorado 80110
Tel (303) 761-7470 * Fax (303) 761-8662
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