Strategy & Tactics

October 8, 2026

Natural Gas: A Cyclical Bull Market, Preparing for Its Second Advance

Recommendation: Monday, October 5, 2026

The powerful advance in natural gas during late January marked the beginning of a new cyclical bull market. We anticipate a second major advance, potentially exceeding the first, with a projected price extension equal to 1.618 times the length of the initial advance.

The recent decline appears to have culminated in a washout low, testing the triple-bottom formation developing since August. From a risk-management perspective, this successful test strengthens our confidence that a significant low is in place and that natural gas is preparing for its next advance.

The October resistance zone has shifted higher to $3.412–$3.588. The late-September volatility breakout established a high near $3.41–$3.42, coinciding with the lower boundary of that resistance zone. A decisive move through this level would open the way toward $3.60 in natural gas futures, with the potential for a substantially larger advance as the cyclical bull market unfolds.

For leveraged ETF traders, our BOIL objective is $30 between now and year-end, a target we consider modest in the context of the anticipated advance.

Options Strategy

For traders seeking greater leverage, we identified two BOIL call-option opportunities on October 5:

BOIL October 16, $21 Call: Quoted at $0.61 bid and $0.89 ask, with a preferred limit entry near $0.75–$0.80. Open interest stood at 829 contracts, with 372 traded that day. At expiration, a BOIL price of $25 would produce $4.00 in intrinsic value, approximately five times the proposed premium. At $27.50, intrinsic value would reach $6.50, approximately eight times the premium.

BOIL October 23, $21 Call: Quoted at $1.07 bid and $1.21 ask. This alternative provides seven additional days for the anticipated advance to develop. At expiration, BOIL at $25 would represent $4.00 in intrinsic value, approximately 3.3 times the quoted ask premium. At $27.50, intrinsic value would reach $6.50, approximately 5.4 times that premium.

These option scenarios illustrate the potential leverage available from a timely advance, rather than fixed exit objectives. Both contracts are short-dated, making the timing and speed of the anticipated move critical.

Our central forecast remains unchanged: Natural gas has established a cyclical bull market, the recent triple-bottom test supports a significant low, and the next major advance is expected to carry prices materially higher.

 Last trade as we go to press: $1.49.