NEW YORK ( TheStreet) -- In my top stock recommendations for 2010, I made natural gas my No. 1 sector play in energy. If you only had one stock to add to your portfolio, I believed then it had to be in natural gas. I believe I'm right about that recommendation still. Nothing makes more sense to me than the story on natural gas. It is domestic, cheap and plentiful. It's got undeniable advantages to crude, coal and certainly any alternative you can name. But I've struggled with the proper stock or group of stocks to get the exposure I've wanted. And I'm still searching. Natural gas news has continued to flood the financial airwaves. Just in the last week, four more deals hit the tape. Royal Dutch Shell ( RDSA) agreed to a major tight gas deal in China with the government parent of PetroChina, ( PTR) right after making a very big deal for Australian natural gas company Arrow Energy ( AOE). Linn Energy ( LINE) just inked a deal to buy the natural gas assets of Highmount exploration, which has exposure into the Antrim shale deposits of the Michigan basin. Enbridge Energy ( EEQ) has begun inquiring if the commodity providers are ready to support a big new investment in a pipeline to bring gas exclusively from the Marcellus shale area in Pennsylvania to Chicago. And Consol Energy ( CNX), a coal company, has continued to buy shares of its own natural gas company, CNX gas, which it spun off in 2006 and have since been trying feverishly to buy it back. This last slug of shares it bought come one short week after spending $3.5 billion for Dominion Resources' ( D) Appalachian natural gas resources, more than a third of which are also located in the hot Marcellus. The proof is everywhere. Natural gas is where you've gotta be. But some other fundamentals have taken the space down for the last several weeks. First, obviously, there's been a price decline in natural gas futures, inspite of draining stockpiles from a very tough winter. Natural gas futures have gone from close to $6 an mMbtu on the NYMEX to trade very close to $4 recently.
Then, a spate of analyst downgrades in the space hurt natural gas stocks across the board. Those analysts now seem to agree that natural gas prices will remain depressed for several more years. Even the CEO of Schlumberger ( SLB), Andrew Gould, recently expressed doubt about the picture for natural gas operations at least until 2013. But I know something they don't know. The natural gas futures market doesn't have to work logically. I've seen three spikes in natural gas in the last five years and none of them were spurred by anything you could call a breathtaking dislocation. I don't know what will spur the next one, but I would not be betting on natural gas staying at $4 while crude oil is hovering at $80. Even as small a change as the managers at Goldman Sachs deciding to increase the percentage of natural gas in the market-leading S&P GSCI Commodity Index, or perhaps an increase of available shares of the United States Natural Gas ( UNG) could start the fire burning. So, how to play it? As I said, I've been struggling. I had a significant position in Chesapeake ( CHK), sold it all in frustration at $25.50 and slowly have been reaccumulating it here at $23. If it gets closer to $20, I may have to back up the truck. I've also started to establish a position in Cimarex ( XEC) after that stock was nice enough to drop under $60 a share. And SandRidge ( SD), which Jim Cramer recently mentioned after I recommended it last week, is still a very cheap stock that correlates almost perfectly with natural gas prices, the most significant reason you can buy shares for a little over $7. To be truthful, however, I'm not perfectly comfortable with any of these but I know I can't stay out of the natural gas space for long. It's a no-brainer and just has to work somewhere in here.