A Quick Look At Natural Gas

Last night on CNBC Fast Money, we had a short segment planned where we would go over the seasonal tendencies for Natural Gas. I figured it was a timely conversation since I believe there's a trade to be had here, but time ran out on the show. No worries though, here are some of the points we were going to discuss.

The first chart is a seasonality study for Natural Gas going back 5, 10 and 15 years. The second chart represents the last 20. Notice how consistently rallies get going during the month of September.

And the third chart is pure price. On August 8th we had a key reversal day in Natural Gas. After getting slammed for weeks, Natgas was unable to sell off on bad news. Well, it actually did selloff right on that inventories number that day, but came roaring back minutes later. To me, there's no better entry point than that.

After some nice follow through, natural gas is holding above the late August resistance as well as its rising 20 and 50 day simple moving averages. These smoothing mechanisms are at an important place right now. This level also represents the downtrend line from the June highs. Last week, that broken trendline was tested successfully.

So the way I look at it, Natural Gas can be a long all day above those moving averages and downtrend line. So that's your stop for now. As long as we're above last week's lows, I think we can stay long.

Go get em!

Sources:

Seasonal Charts: Natural Gas (Signal Financial Group)

Commodity Traders Almanac 2013 (Jeff Hirsch)

Tags: $UNG $NG_F