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Natural Gas Price Ready To Heat Up?

Date post: 15-Aug-2015
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Transcript

Anyone who follows the energy markets will tell you the same thing…

It has been an exceptionally rough year for natural gas and the companies

producing it.

Over the past 12 months the price of the gaseous commodity has fallen 25%. With natural gas currently trading near multi-

year lows at $2.00 mmBtu, it should come as no surprise that natural gas

exploration companies are falling on hard times.

First of all, natural gas exports are scheduled to start in a few months.

Cheniere Energy’s $LNG Sabine Pass facility is on track to start overseas

deliveries sometime this quarter or early in the fourth quarter.

The Summer of 2015 is turning out to be a toasty one. The Eastern and Central US is

in the grips of a suffocating heat wave. Temperatures soaring into the mid-90’s

and 100’s across various states has consumers cranking up the air

conditioning.

Of course, with higher power demand comes higher natural gas usage.

And according to the NOAA, hot temperatures are going to stick around for

a while…

As you can see in this 6-10 day outlook, the entire Eastern half of the country will likely see above average temperatures.

But here’s what’s really piquing my bullish interest in natural gas…

Notice how the green trend lines in the chart above are converging to a point on

the right side of the chart. This is called a triangle consolidation pattern. These

formations tend to result in an explosive price reaction when either trend line is

broken.

As you can also see, natural gas is sitting just beneath the top green trend line.

If the commodity can break above $2.95 mmBtu in coming sessions, we may see bulls take control of the market, possibly

sending it to the $3.20 area or higher.

How do you capitalize on such a situation?

I laid out the best energy non-leveraged energy focused ETFs the market has to offer here. If you’re looking to add a bit more juice to your gains, consider the

leveraged natural gas ETFsin this article.


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