TuesdayFiled under Oil and Gas
We have opened a long Natural Gas ETC at 0.735 – 2000 units. Natural Gas May 09 contracts are trading at $3.68-3.75. Refer to charts below. Whilst Crude oil has gone up with the market rally, Natural Gas have remained depressed and is trading close to recent lows. The ten year low for Natural Gas is about $2 (refer to chart). We believe a multimonth rally is here, and that prices of all commodities (should) rise with the market. Technically, NG is extremely oversold and is due for a recovery (albeit a temporary one until the next decline). We have anchored very lightly, and have chosen ETC simply because it has NO EXPIRY date, which from experience is important for non-day traders like us. Close to expiration, prices of commodities are usually subject to extreme manipulation defying all logic and fundamentals – usually depending on the net short:long and the direction it moves really is beyond us. Our monthly indicators suggest a multimonth rally is approaching, potentially one more dip down (which will suit our under leveraged position just fine) before heading up.
We are tempted to hit harder but will stick to our Rule that you can never pick the turning point. General restrain is required after such a massive rally (more significant upside to come medium term), as we hope for a pull back to reenter more longs. Continue…asdf