Natural Gas Stocks Will Rebound: Your Opportunity for Massive Gains
- Money managers haven’t been this bearish on natural gas since December 2017.
- It’s down 56% from its high in November.
- But the price of natural gas stocks are due for a rebound.
- There’s an easy way to make double- and triple-digit gains when prices jump.
Natural gas is trading at $2.12 per million British thermal unit — the unit of heat we use to measure natural gas. That’s a record low!
I’ve never seen the price this low. Ever.
It’s 27% lower year to date. And it’s down 56% from its high of $4.79 last November.
Money managers are the most bearish they’ve been on natural gas since December 2017.
And that’s good news for us.
Because the price of natural gas stocks will rebound, it’s due.
The last time an opportunity like this surfaced, the price of natural gas stocks jumped 43% in five weeks!
A similar jump is set to happen again. And there’s an easy way you can bet on it…
Natural Gas Is Too Cheap — It’s Time to Buy
The price of natural gas is dropping lower and lower.
My colleague Matt Badiali had this to say about natural gas earlier this year:
The fact is, natural gas is just too cheap right now. This is one of the most important fuels in the U.S. today … because it’s the backstop for all the alternative energy in the U.S.
That’s because neither wind nor solar can produce power 24 hours a day, seven days a week. And there are no commercially viable batteries large enough to store enough power to get through the night.
Instead, there are natural gas turbines.
Natural gas will remain an important fuel for years to come. Yet, traders are treating it like yesterday’s newspaper.
The following chart shows the price of natural gas futures, a market where traders agree to buy or sell an asset in the future at an agreed-upon price.
I added an indicator to the chart that shows how futures traders feel about natural gas:
The blue line is the futures positioning of producers and processors that use the underlying physical commodity in real life.
They use futures to hedge their hard asset exposure. So, the blue line moves opposite the red line because hedging protects producers against a sudden turn in the prevailing trend.
I’m most interested in the red line running across the bottom.
It is the collective positioning of money managers who are trading natural gas futures. These guys are traders trying to earn profits.
When the red line is below the dotted line, money managers are bearish. The further the red line falls, the more bearish they are.
And their bearishness just reached a new extreme.
When money managers rush into a one-sided bet like this, prices usually experience a sudden change in direction.
This tells me the price of natural gas is about to jump.
BOIL ETF: Quick Returns at a Cost
Independent investors can bet on natural gas without having a futures account.
You can buy a natural gas exchange-traded fund (ETF) just the same way you’d buy and sell a stock.
The ProShares Ultra Bloomberg Natural Gas ETF (NYSE: BOIL) tracks the price of natural gas.
It’s a leveraged ETF, which means it’s designed to move twice as fast as a regular ETF.
When the price of natural gas jumped by 71% from August to November last year, the price of BOIL jumped by 160%!
But leveraged ETFs are not designed for you to buy and hold for a long period of time.
They tend to have an above-average expense ratio and a daily rebalancing cost (a necessary evil to maintain the leverage).
BOIL is a good way to bet on a double-digit rebound in the price of natural gas.
But it’s no different than other leveraged ETFs. If natural gas doesn’t make its move fast, BOIL will eat into your profits while you wait.
If that sounds too risky for you, I have a better approach.
Join Apex Profit Alert for Bigger Returns
Matt Badiali and I unveiled a new system last week. We call it Apex Profit Alert, and it allows investors to earn double- and triple-digit gains without using leveraged ETFs.
Our system uses a “buy on black” indicator that signals when to get in or leave a trade. It’s been firing off new buy signals left and right.
It’s set to trigger a natural gas trade this or next week.
The response from people signing up has been huge!
Now, we closed enrollment last night.
But we got permission from our publisher to open it back up one last time. This sign-up is exclusive for Winning Investor Daily readers who get my article today…
Click here to get in on the action.
We want to help you make the most from your trades and tap into monster gains.
Editor, Apex Profit Alert