FxWirePro: Two new targets for our buy call in Natural gas

In a previous article, titled, “FxWirePro: Buy natural gas at dips; target $4.3 per mmbtu”, available at http://www.econotimes.com/, we suggesting buying natural gas as the demand outlook changes from globally due to de-carbonization of the fuel we use. We have moved from wood to coal to oil and now we are moving from oil to natural gas.

However, other than this fundamental, we have also written on other reasons to go long in natural gas and the most prominent of them has been lower supply. This year, natural gas injection to the underground storage during the injection period from April to October has been remarkably low, the lowest in at least six years. Due to these factors, we felt that the natural gas has formed an important bottom below $2 area. Hence, we called for a long in natural gas at dips around $2.5-2.6 area, with stop loss around $1.9 area and the target around $4.3 area.

As the natural gas price has broken a key resistance and trading around $3.06, we would like to add to more targets in addition to the current one; one at $3.7 per mmBtu and the other $5.5 per mmBtu. We also expect the natural gas price not to dip below $2.5 per mmBtu area.