How to Profit from a “Bad News” Natural Gas Trade

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How to Profit from a Bad News Natural Gas Trade

How to Profit from a “Bad News” Natural Gas Trade

A “bad news” convene is one of a many absolute army in a markets. When a batch or commodity rips aloft on bad news, your best pierce is to buy with both hands.

And bad-news shopping is accurately what we’re saying in healthy gas this week, giving we a shot during quick, double-digit gains if we follow this rising trend today.

Here’s a deal:

Natty has been stranded in neutral nearby a 2015 lows—even as wanton springboards aloft this month. Yeah, we already know a cost of oil is adult some-more than 20% from a Aug lows. But healthy gas? Let’s only contend it’s missed all a fun. Until yesterday, that is…

Natty jumped scarcely 3% Thursday, posting a biggest benefit in roughly a month. Why? Well, a large news was that healthy gas producers combined a whopping 86 billion cubic feet of a things to storage final week. As a Wall Street Journal points out, that’s 40% more than a five-year average.

As we can see, we ain’t accurately pang by a gas necessity these days. Heck, we’re most swimming in a stuff. But a cost healthy gas didn’t tank on a news. Instead, traders started buying.

Natty’s pierce aloft this week should assistance a commodity mangle out of a summer funk. Just demeanour during a parsimonious monthly operation for healthy gas so distant this year compared to a pointy adult and down moves of a past decade:

Stuck in Neutral

Of course, there’s reason to trust that healthy gas can start a postulated run aloft here into a fall. U.S. oil prolongation is disappearing sharply. According to a sovereign report, only one of 7 shale basins is approaching to announce prolongation gains. The others? Well, let’s only contend a wanton pile-up has tied prolongation in a knot.

And reduction drilling means reduction healthy gas byproduct. While we still consider a oil snapback play has legs, some experts see orderly as a ideal appetite trade streamer into a final widen of 2015:

“Both short-term and medium-term, healthy gas producers are substantially in a improved place than oil producers,” reports. “On a one hand, direct is a churned bag. It is not rising quite as most as once predicted, though with some-more appetite plants switching from spark to gas, expenditure will continue to collect up. With appetite direct some-more or reduction low or during best solemnly flourishing in a U.S., healthy gas direct increases need to come essentially from holding share from other existent fuel sources.”

That’s some “bad news” that can unequivocally boost your portfolio…


Courtesy: Greg Guenthner for The Daily Reckoning