FxWirePro Call Review: Add additional short positions in Natural gas

In an article published on June 2nd, named, “FxWirePro: Bears win in Natural gas; ready to push towards $2.68 per MMBtu”, available at http://www.econotimes.com/FxWirePro-Bears-win-in-Natural-gas-ready-to-push-towards-268-per-MMBtu-740965 , we recommended selling natural gas at the then current price around $3.02 per MMBtu with a target around $2.68 per MMBtu. Since then natural gas has declined steadily to reach as low as $2.75 per MMBtu.

In a subsequent article published earlier this week, we have upgraded our natural gas outlook from bearish to very bearish. Since our last analysis, natural gas has moved higher after forming a base around $2.75 per MMBtu, however, that is not making us change our outlook. Instead, we feel that price is becoming ripe to add additional short positions.

The recent increase in demand and the US entering the global market as an exporter is likely to increase natural gas supplies in the near term and would push price lower. It can be seen in the chart that natural is nearing a key downtrend line. The gas price is currently at $2.98 per MMBtu. It is advised to sell close to $3 per MMBtu.