Focus Advisory

Positioning for Major Reversal in Natural Gas Prices

The move up from the low of $3.20 is a head fake. The market is greatly over supplied, LNG is set to double this year, and industrial demand should weaken further with multiple auto plants going idle this summer.
I don't think gas goes below $3, but gas will pull back again to test the low. Price is not a catalyst to buy. The catalyst will come late summer early fall when prices are low and investors are betting on a recovery in 2010 and its coming winter weather.
Natgas stocks are WAY ahead of themeselves. If they don't come back as gas does, I'll play the rebound with UNG.

Regards