natural gas index

I received an update from the Australian Small Cap Investigator recently and it showed a chart of the index of natural gas stocks that had decreased significantly. Perhaps it was due for a rebound and that is one of the reasons why BUL is currently rebounding. The update also mentioned that it is set to recommend a nat gas stock next month. Considering that BUL was previously a tip from this newsletter, before being stopped out, perhaps there are punters out there betting that BUL is about to be re-tipped. Even Dr Cowie of Diggers and Drillers mentioned that natural gas is in his sights. Yet another reason for the punters to jump in speculating. Metgasco (MEL) I think was another previous tip (you guessed it...stopped out) and that has also undergone a big rally over the last week. I find that rallies based on this type of speculation and nothing fundamental falter 9 out 10 times.

Back to the nat gas index chart, I would be betting that the steep decline recently needs to be consolidated before hitting a new low with less oversold readings in the indicators and hence providing some bullish divergences. This leads me to believe that BUL will come down to a new low once this rally is over.