FxWirePro: Buy natural gas at dips, next short-term target $3.9 per MMBtu

We at FxWirePro have been bullish on natural gas since $2.6 per MMBtu and the price is almost a dollar up from there, and it has reached two of our targets at $3.1 per MMBtu and $3.7 per MMBtu, yet we feel there still lots of juices left in natural gas on the long side and anyone looking to build fresh positions or add on the previous, $3.5 and $3.4 area would be good to do that.

Forecasts suggest that this winter likely to be harsher compared to the previous two and there could polar vortex ice blast in December, similar to the one felt in January of 2014. Only major bearish factor for natural gas is the record high inventory level, which can be challenged only by a harsh winter followed by a hot summer. It seems winter is right in place to push prices higher.

We recommend going long around $3.4 and $3.5 per MMBtu, with a short term target around $3.9 per MMBtu. Our longer term target of $4.3 per MMBtu and $5.5 remain active too.