I like the reasoning and I like the chart although it is not bouncing much. I think what's working against this is inventories are drawn down due to the late season cold and what appears to be another cold wave for the second half of the month...I am just seeing this second cold wave reported on from Celsius Energy...nonetheless I think DGAZ is the right side to be on.
"Following the EIA's Storage Report, natural gas rebounded from early-session losses to finish the day up 3 cents or 0.9% at $2.87/MMBTU. Natural gas prices have now risen 7 out of the last 10 sessions and are within a penny of 6-week highs. My near-term price target remains at $2.90/MMBTU. The near-term temperature outlook remains favorable with yet another widespread arctic outbreak expected for the March 15-25 period that seems likely to drive end-of-season inventories under 1000 BCF for the first time since 2014. Thereafter, both the CFSv2 and last night's run of the ECMWF-EPS long-term models are in good agreement that temperatures will sustainably warm by the second week of April. Natural gas investors are very forward-looking and such a warm-up would often result in the typical seasonal selling pressure. However, I am becoming increasingly convinced that, to use 4 of the most dangerous words in investing, "this time is different." Not only are natural gas inventories at multi-year lows driving a calculated Fair Price above $4.00/MMBTU, but the natural gas supply/demand balance has tightened considerably which will likely maintain a large storage deficit for longer than the bears may be expected which could escalate fears of a supply crunch come next Autumn. While it is certainly possible that seasonality will at some point take hold and send prices back under $2.75/MMBTU, I am becoming less inclined to try and time the pullback with a swing short position and may just continue holding long via short DGAZ--and may even increase my net long position from its current lackluster 3% to the 7%-10% range,"
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