Focus Advisory

Will Natural Gas Be the Next to Rally?

The north American rig count is down 52% since last year. Production is coming off in a big way and when demand crosses over, the price will go up 50% in one month.
UNG is the best risk reward trade in the market for remainder of 09.
Regards

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