Cramer Thinks That A Rebound In Natural Gas Could Be Coming

CNBC Mad Money's Jim Cramer spoke on the show about the price movement in natural gas and he used technical analysis of Carley Garner to get a grip on a possible future price movement.

Cramer said that the commodity has been getting absolutely hammered for months because of mild summer weather, but now it could be ready to bounce back as the winter approaches and the utilities start to increase inventory in September to meet the increased demand expectations.

He analyzed on the chart Commitments of Traders, which Carley Garner uses a lot, and showed that large traders have a very big short position, which according to Garner means that the downside is limited and that a short squeeze might happen.

On a weekly chart, Stochastic technical indicator and Williams %R oscillator are showing that natural gas is oversold, but on the daily chart they have not yet reached the oversold levels and Garner believes that the price could decline to $3.60 before it makes a move higher. If the commodity bounces above $4 it could go to $4.90.

Cramer agrees with the analysis of Carley Garner and he thinks that buying domestic producers is the best way to get long natural gas.