Natural Gas ETF

Althought I'm not an expert, I understand there is some problem right now with regulators wanting to reduce the impact this type of fund supposedly has on commodity prices. I can see how a bunch of speculators can cause an artificial price rise, as in the price of oil a year ago. The regulatory climate right now is causing the price of the ETF to diverge from the price of the commodity. If you google "UNG Halts share creation" you will find several commentaries and news stories.



I agree that the price of the commodity itself is historically very low, but I don't think the ETF is the way to take advantage of it. If somebody has a good idea, I too would like to hear it.



Just my thoughts... I are an engineer, not a financial guy.
 
I had several clients want to look into this trade so I dug a bit. The ETF is most certainly out as my people wanted to hold long for a good bit of time and the ETF is just too inefficient as an investment vehicle. Short of going into the futures and com markets I just couldn't find a good play. If I could buy a tank and leave it there that would be the best I could come up with but as of this time such an investment does not exist...sorry
 
[quote author="rick_r" date=1251361976]What do you guys think of UNG (Natural Gas ETF)?



Looks like it might have hit a bottom, thinking about investing some serious $$$ into it.



I can't see it getting much lower then it is right now. Opinions are appreciated.



http://finance.yahoo.com/echarts?s=...=on;ohlcvalues=0;logscale=on;source=undefined



Thanks</blockquote>


I personally love ETFs, and have been recommending them to others who got killed in mutual funds and sick of paying mgmt fees. Some ETFs are for trading (2x, 3x levered) and some are good for holding long term.

The best way to invest in commodities are buying individual companies, gold miners, natrual gas producers, oil dirllers...etc. But if you don't want to take company specific risks and have no time for in depth research, I say ETF is the way to go.

Now on to natural gas, I attached two screen shots, one comparing two natural gas ETFs and the other compring the natural gas commodity price against ETF. You be the judge.

Typically when natural gas made a run, its 2-300% to say the least, you just don't know when it will start, so I will recommend accumulate slowly over time. Good luck
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[quote author="BondTrader" date=1251414341][quote author="rick_r" date=1251361976]What do you guys think of UNG (Natural Gas ETF)?



Looks like it might have hit a bottom, thinking about investing some serious $$$ into it.



I can't see it getting much lower then it is right now. Opinions are appreciated.



http://finance.yahoo.com/echarts?s=...=on;ohlcvalues=0;logscale=on;source=undefined



Thanks</blockquote>


I personally love ETFs, and have been recommending them to others who got killed in mutual funds and sick of paying mgmt fees. Some ETFs are for trading (2x, 3x levered) and some are good for holding long term.

The best way to invest in commodities are buying individual companies, gold miners, natrual gas producers, oil dirllers...etc. But if you don't want to take company specific risks and have no time for in depth research, I say ETF is the way to go.

Now on to natural gas, I attached two screen shots, one comparing two natural gas ETFs and the other compring the natural gas commodity price against ETF. You be the judge.

Typically when natural gas made a run, its 2-300% to say the least, you just don't know when it will start, so I will recommend accumulate slowly over time. Good luck</blockquote>


I just made my first purchase.



Thanks Bondtrader
 
[quote author="rick_r" date=1252633132]Go UNG, just broke $11



I loaded up in the 9's</blockquote>


Just a quick note, the good news, money is flowing into this, so it should go higher overtime, bad news, it's going into resistence around $12 in short term, take some off the table or write some calls.
 
I love nat gas and it is oversold. I wish the UNG was a good vehicle to get direct exposure but these ETFs are not efficient. Nat Gas is up 50% in the last 2 weeks and yet the UNG doesn't really move. You gotta go after companies that explore, produce and hold the commodity, and ride that wave. I think heating over is oversold as well.
 
[quote author="BondTrader" date=1253162112][quote author="rick_r" date=1252633132]Go UNG, just broke $11



I loaded up in the 9's</blockquote>


Just a quick note, the good news, money is flowing into this, so it should go higher overtime, bad news, it's going into resistence around $12 in short term, take some off the table or write some calls.</blockquote>


Looks like it's having a tough time staying above $12. I might buy some puts like USC did.
 
Go UNG Go.



Closed at $12.10 today.



Hanging on till $20 this winter. Remember historical ratio of Oil to Nat Gas is 6 to 1. We are currently at 25 to 1.



Good Luck all.
 
Decent volume (accumulation) the last two days, but nothing huge. Until it can stay firmly above 12, I still believe you will see 10-10.5 before you see $14-15. The current inventory situation (full capacity) will not support the price from going any higher, but today's market has nothing to do with foundamentals, it's just a game of greater fool.

Good luck
 
<a href="http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aPK_s2g0zrZI">U.S. Homes to Spend 8 Percent Less on Winter Heat (Update2) </a>



shorting oil right now instead...
 
[quote author="BondTrader" date=1254875734]Decent volume (accumulation) the last two days, but nothing huge. Until it can stay firmly above 12, I still believe you will see 10-10.5 before you see $14-15. The current inventory situation (full capacity) will not support the price from going any higher, but today's market has nothing to do with foundamentals, it's just a game of greater fool.

Good luck</blockquote>


Just a quick update on UNG, on the daily charts, it's in the oversold territory but the weekly charts indicates there will be more downside. I will probably wait for it to get within 9.5-10 to get in, but keep in mind the fundamentals are not supporting it to go much higher, at least for the near term.
 
[quote author="BondTrader" date=1254875734]Decent volume (accumulation) the last two days, but nothing huge. Until it can stay firmly above 12, I still believe you will see 10-10.5 before you see $14-15. The current inventory situation (full capacity) will not support the price from going any higher, but today's market has nothing to do with foundamentals, it's just a game of greater fool.

Good luck</blockquote>


Without going into too much technicals, I believe its about time for UNG to pop again. But I will wait for a big down day, 5-10% drop with volume spike to get in. Target around $9 or even below.
 
[quote author="BondTrader" date=1257807221][quote author="BondTrader" date=1254875734]Decent volume (accumulation) the last two days, but nothing huge. Until it can stay firmly above 12, I still believe you will see 10-10.5 before you see $14-15. The current inventory situation (full capacity) will not support the price from going any higher, but today's market has nothing to do with foundamentals, it's just a game of greater fool.

Good luck</blockquote>


Without going into too much technicals, I believe its about time for UNG to pop again. But I will wait for a big down day, 5-10% drop with volume spike to get in. Target around $9 or even below.</blockquote>


BT, I will put a limit order for 1000 shares at 9.00 or under. Natural gas seems to be only commodity play that seems cheap right now compared to the dollar. Precious metals are up, Agriculture is up, and Oil is up. I mean where else can get anything for 85% off from retail? I wish Irvine home prices would see these kind of discounts. I think UNG is a good long term play. I am Dollar cost averaging from here.
 
[quote author="PANDA" date=1257829574][quote author="BondTrader" date=1257807221][quote author="BondTrader" date=1254875734]Decent volume (accumulation) the last two days, but nothing huge. Until it can stay firmly above 12, I still believe you will see 10-10.5 before you see $14-15. The current inventory situation (full capacity) will not support the price from going any higher, but today's market has nothing to do with foundamentals, it's just a game of greater fool.

Good luck</blockquote>


Without going into too much technicals, I believe its about time for UNG to pop again. But I will wait for a big down day, 5-10% drop with volume spike to get in. Target around $9 or even below.</blockquote>


BT, I will put a limit order for 1000 shares at 9.00 or under. Natural gas seems to be only commodity play that seems cheap right now compared to the dollar. Precious metals are up, Agriculture is up, and Oil is up. I mean where else can get anything for 85% off from retail? I wish Irvine home prices would see these kind of discounts. I think UNG is a good long term play. I am Dollar cost averaging from here.</blockquote>


Good luck, I do expect the Sep low ($8.94) will hold at least for the short term. If you believe the trend is your friend, UNG is still in a big downward trend until it can break $15. I know you are an investor not a short term trader, just want to remind you don't go all in at once.
 
[quote author="BondTrader" date=1257903415][quote author="PANDA" date=1257829574][quote author="BondTrader" date=1257807221][quote author="BondTrader" date=1254875734]Decent volume (accumulation) the last two days, but nothing huge. Until it can stay firmly above 12, I still believe you will see 10-10.5 before you see $14-15. The current inventory situation (full capacity) will not support the price from going any higher, but today's market has nothing to do with foundamentals, it's just a game of greater fool.

Good luck</blockquote>


Without going into too much technicals, I believe its about time for UNG to pop again. But I will wait for a big down day, 5-10% drop with volume spike to get in. Target around $9 or even below.</blockquote>


BT, I will put a limit order for 1000 shares at 9.00 or under. Natural gas seems to be only commodity play that seems cheap right now compared to the dollar. Precious metals are up, Agriculture is up, and Oil is up. I mean where else can get anything for 85% off from retail? I wish Irvine home prices would see these kind of discounts. I think UNG is a good long term play. I am Dollar cost averaging from here.</blockquote>


Good luck, I do expect the Sep low ($8.94) will hold at least for the short term. If you believe the trend is your friend, UNG is still in a big downward trend until it can break $15. I know you are an investor not a short term trader, just want to remind you don't go all in at once.</blockquote>
I would recommend selling uncovered Dec $9 puts if you want to establish a position.
 
[quote author="BondTrader" date=1257903415][quote author="PANDA" date=1257829574][quote author="BondTrader" date=1257807221][quote author="BondTrader" date=1254875734]Decent volume (accumulation) the last two days, but nothing huge. Until it can stay firmly above 12, I still believe you will see 10-10.5 before you see $14-15. The current inventory situation (full capacity) will not support the price from going any higher, but today's market has nothing to do with foundamentals, it's just a game of greater fool.

Good luck</blockquote>


Without going into too much technicals, I believe its about time for UNG to pop again. But I will wait for a big down day, 5-10% drop with volume spike to get in. Target around $9 or even below.</blockquote>


BT, I will put a limit order for 1000 shares at 9.00 or under. Natural gas seems to be only commodity play that seems cheap right now compared to the dollar. Precious metals are up, Agriculture is up, and Oil is up. I mean where else can get anything for 85% off from retail? I wish Irvine home prices would see these kind of discounts. I think UNG is a good long term play. I am Dollar cost averaging from here.</blockquote>


Good luck, I do expect the Sep low ($8.94) will hold at least for the short term. If you believe the trend is your friend, UNG is still in a big downward trend until it can break $15. I know you are an investor not a short term trader, just want to remind you don't go all in at once.</blockquote>


Thanks for the tip BT. I will place my first 1000 share order on UNG between $8.75 - $8.99. I will then start dollar cost averaging 1000 shares every 30 days. When this turns, I can see a 200 - 300% return.
 
[quote author="PANDA" date=1257905932][quote author="BondTrader" date=1257903415][quote author="PANDA" date=1257829574][quote author="BondTrader" date=1257807221][quote author="BondTrader" date=1254875734]Decent volume (accumulation) the last two days, but nothing huge. Until it can stay firmly above 12, I still believe you will see 10-10.5 before you see $14-15. The current inventory situation (full capacity) will not support the price from going any higher, but today's market has nothing to do with foundamentals, it's just a game of greater fool.

Good luck</blockquote>


Without going into too much technicals, I believe its about time for UNG to pop again. But I will wait for a big down day, 5-10% drop with volume spike to get in. Target around $9 or even below.</blockquote>


BT, I will put a limit order for 1000 shares at 9.00 or under. Natural gas seems to be only commodity play that seems cheap right now compared to the dollar. Precious metals are up, Agriculture is up, and Oil is up. I mean where else can get anything for 85% off from retail? I wish Irvine home prices would see these kind of discounts. I think UNG is a good long term play. I am Dollar cost averaging from here.</blockquote>


Good luck, I do expect the Sep low ($8.94) will hold at least for the short term. If you believe the trend is your friend, UNG is still in a big downward trend until it can break $15. I know you are an investor not a short term trader, just want to remind you don't go all in at once.</blockquote>


Thanks for the tip BT. I will place my first 1000 share order on UNG between $8.75 - $8.99. I will then start dollar cost averaging 1000 shares every 30 days. When this turns, I can see a 200 - 300% return.</blockquote>
Panda, sell 10 uncovered puts on UNG either for Nov or Dec. That way if it doesn't get below $9, you collect the premium....if it does go below $9 then your basis will be $9 minus the premium you collected.
 
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