If you haven't noticed, natural gas has gone from laughing stock to favorite commodity over the past year as the price of our most abundant fossil fuel has more than doubled.
While many investors look to lighten up and lock in gains at this time of year, Jeff Hirsch, editor-in-chief of Stock Trader's Almanac, says although the list may be short, there are some bullish seasonal trends in play in May.
"Two things that are really in the middle of a good season are natural gas and crude oil," Hirsch says in the attached video. "They are impacted by the heating season, but also the cooling season and the driving season. So that whole build up period between December and June/July when the usage that drives that bullish season for gas and oil."
And of the two, he says nat gas looks to be the better bet right now. Not only is new demand coming on line but the price is breaking out to a two-year high. "We also think we had a secular low last April (at $1.96 m/btu) for the nat gas market. (UNG, FCG)," he says of the crash that took prices to generational lows. "It's nice that we have a lot of gas but there's more demand coming in and the supply is being taken up."
Crude is also in its sweet season but Hirsch is more mindful that it has been trading in a $10 range for 10 months, having made seven swings between $85 and $95 since last summer.
"I think we're looking (to play crude) from the low end of the range right here. I don't think we're breaking out to new highs."
- natural gas