We are long-term bulls on Natural Gas ($NG) and see both the macro and technical Bull case for $NG improving.
The former (macro) case includes declining rig counts, increasing exports, environmental concerns, increased $NG power generation, rising diesel prices, seasonality (likely discounted) and more.
We prefer to focus on the latter (technical) case and let the market do the speaking.
The technical case includes bearish sentiment combined with a break of a 3 year downtrend.
We find “the latter” technical case is much easier to articulate.
Natural Gas – $NG Weekly Trading Channels
The chart above shows $NG at an inflection point that may provide short-term resistance. A break-out of the inflection point above will confirm the break-out of the 3 year downtrend seen in the chart below.
$NG Weekly with Positive Trending Oscillators
Some of the technicals for the macro case below
August 2012 Monthly Dry Shale Gas Production
Weekly Natural Gas Rig Count
High Seasonal Storage levels will pressure rig count, which is bullish for $NG prices
We rate $NG Green in the Bikini State.
Stocks we own or are watching for trading opportunities are CHK, DVN, CVX, SWN, RRC, and XOM
Disclaimer: This communication should not be construed as an offer to sell or the solicitation of an offer to buy any security. (Click here for full disclaimer)