Will This Time For Real ?

I have been writing for a return of a super bull in the natural gas for a couple of times now. But every time an upside break will just last for a short time and prices will just sank again. But the charts continue to favor the super bull.

Looking at the daily chart for May Natural Gas shows what appears to be a rounded-bottom formation. In addition, the 14-day RSI is showing a bullish divergence going back to August of 2010. Prices are now well above the 20-day moving average, which should spark additional short-term momentum buying. To really put the bulls back in control, when if price is to go back   above the 200-day moving average, which is currently near the 4.500 level, then we may finally see a strong revival of the bull market in this market. 

 

The fundamental story behind a possible bull rally:-

Natural Gas bulls received new life recently, as concerns over the future of nuclear power generation has triggered fresh interest in this beleaguered commodity. As Japan prepares to recover from the devastating earthquake and tsunami, it is believed that the country will be turning to fossil fuels, such as coal, fuel oil, or Natural Gas to fire their power generators. Japan currently receives Natural Gas in liquefied form, which needs to be shipped in specialized tankers. This method of delivery may limit the amount Japan can rely on Natural Gas to meet its power generating needs, as this is not as efficient as having Gas moved via pipelines. So while it appears that increased Japanese demand may not be enough to spur a price rise, the effects of the "nuclear debate" may cause the U.S. and other nations to re-evaluate their own reliance on nuclear energy for power generation and could trigger increased demands for Natural Gas, particularly here in the U.S. where supplies are plentiful. On Thursday, Natural Gas futures got an additional bullish lift, as the weekly EIA gas storage report showed 56 billion cubic feet of Gas was removed from storage last week, which was well above the 44-bcf draw most analysts were expecting. A look at the most recent Commitment of Traders report shows large non-commercial traders holding a huge short position of 217,250 contracts as of March 8th. This short position may be the ultimate catalyst for higher Natural Gas prices if these large speculative traders begin to lighten-up their positions.