Nat Gas Stocks Remain Relatively Cheap

Author Larry Berman

Posted: 7 Aug 2012 re-posted from etfcm

The S&P TSX should play a little catch up today and it is clear that the price action in the past few months has been confusing to say the very least. We expect more choppy markets in the coming months with crude oil leading to most of the choppiness, and gold adding to that theme as well. In the next few months, we are sellers above 12,000 and buyers below 11,400 and see little scope for a strong move beyond either side of that range.

Nat gas stocks remain the relatively cheapest part of the TSX and make some sense for investors to accumulate on weakness in the coming months. We do not see a robust recovery for a while, but the longer-term risk reward is compelling in the sector. The fact that they have not moved much and nat gas has bounced from the $2 area, suggests that the market does not believe just yet.



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