tornado999's  Instablog

Financial Market Heat Grid takes note of Strong Bullish Signs for Natural Gas -- The Great Contrarian Energy Play for 2011 has high potential to create big winners -- the Heat Grid indicates that the best-in-class candidates are: Chesapeake Energy  ( $CHK ) ; and Carrizo Oil & Gas ( $CRZO ).

Some of the fundamental factors that play into this thesis are:

(1) Oil has stolen the spotlight, with a disproportionate demand for shares of oil companies.

(2) The price of Natural Gas is at near 20 year lows, resting at a point of maximum pessimism. With prices so cheap on a relative and absolute basis, there is potential for customers to diversify their energy usage into the Natural Gas space.

(3) The supply of Natural Gas will not meet the demand, once people realize that higher Oil prices, and energy prices in general are here to stay, as the world's middle class and emerging nations begin to use more of it, at increasing rates.

(4) Once people catch onto the shifting trend in Natural Gas, asset inflation -- driven by momentum strategies -- will reflexively reinforce the fundamental demand for both the shares of natural gas companies, as well as the underlying futures contracts that support improvements in their margins.
 
It's all about perception, and The Financial Heat Grid has locked into a subtle field of information that shows that our perception fields are about to see a reflation in Natural Gas that will restore its price to more natural levels.