On February 7, in a Barchart article that asked, “How low can natty gas go,” I wrote:
Natural gas is a volatile energy commodity that tends to take no prisoners when it decides to move higher or lower. One of the most significant factors for the path of least resistance of prices is if the market becomes overly long or short. In February 2024, speculators are short. The extent of those risk positions could determine the path of least resistance of prices and if the energy commodity could stage a substantial rally over the coming weeks and months.
Natural gas’s penchant for price variance means all risk positions require a plan with risk-reward horizons. While altering the plan’s dynamics when natural gas prices move in the anticipated direction is acceptable, adjust stops to protect profits and capital. When the move is contrary to expectations, take your lumps and start over, as a small loss is far better than a catastrophic one.
