To the surprise of almost everyone, natural gas has turned out to be the fastest rising commodity of 2012. Just six months ago, many assumed that gas would struggle to move higher for years to come, thanks to a production glut that overwhelmed demand.
Throw that playbook out the window.
Yet here's the tricky part: Though the fundamentals for gas imply yet higher prices ahead, the technical picture is much less robust. Simply put, this is a commodity that has been forced higher very quickly as a result of trading dynamics -- most notably short-covering by bearish traders. And there's a good chance that traders will look to lock in gains at current levels, and selling pressures will dominate in coming weeks and months -- before the bright fundamental long-term picture takes hold anew. (more)
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