February 25, 2002; Is Natural Gas Doing a Stealth Recovery?

Natural gas futures had a good week with the six-year price rising 6% to $3.38 from $3.20 (see Chart).  Six-year oil price dipped 2% to $20.63 from $20.98.

On another chart, the current daily price of $2.40 is approaching the 200-day average of $2.80.  The 200-day average has been steadily declining.  It would equal the daily price by mid-May if the daily price were to remain constant.  Any time before then that the daily price advanced enough to pierce the 200-day average could mark the confirmation of a new uptrend and a buy point for investors who pay attention to the momentum of trends.

Finally, tying back to the Iraq theme, it would not take much war news to send the daily price crashing through the 200-day average.  Tying in with our emphasis on MRO, about one third of the value in our Strong Buy recommendation is related to natural gas.