Only 16% professionals are bullish on Natgas. Buy now!
Natgas is a beast. I've seen traders getting their hands cut on natgas for years now. I too would like to buy a bottom some time, but the risk/reward never seems to warrant buying in.A few things about the current situation:1) Too much gas in storage - I love to trade contrary to sentiment, but supply and demand tends to trump it.2) Seasonality is negative going into February.3) Sentiment in natgas just doesn't seem that negative to me. COTs are neutral.
Contango in oil and gas kill you. Look the evolution in prices of oil and compare with the USO etf for example. I lived through this experience myself with UNG, while prices of Natgas where up, in a pairs of months holding this etf i lost a lot of money despite the increase in Natgas.
I guess the only way for individual investors to get exposure to commodities without losing their sleep thinking about contango is to buy physical gold and silver. Unless you can physically store large amount of Natgas.
mustbepatient - best time to buy commodities is when supply overwhelms demand. That is when producers cut down and that is how supply works down into a shortage. In 2009, Cotton was in large surplus, and by 2011 it spiked to a all time new record high. Buying Gas around $2.7 is a bargain.Anonymous #4 - I disagree that Precious are only commodities retail investor can buy. Buying Agriculture can make you a lot of money. Same with Industrial Metals. Energy commodities, on the other hand, suffer from a major contango so I agree with you there. You can always play Natural Gas by getting company exposure.