Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Tread Carefully When Trading UNG

By

No end in sight for the collapse of natural gas.

PrintPRINT
Editor's Note: This content was originally posted on the Buzz & Banter, it's being published here for the benefit of the Minyanville community.


The collapse of the natural gas market in the US has been breathtaking. And if you need anything else to worry about, United States Natural Gas (UNG) -- which is in the midst of a massive liquidation -- is selling at a premium somewhere in the neighborhood of 20% relative to the spot price of the commodity. Thus, the end to the carnage is not apparent.

Lots of technicians have been calling for a bottom in natural gas (UNG specifically) for quite a while with absolutely no reference to the fundamentals in this market. Readers should take this as a stern lesson against this sort of fundamentally blind technical trading.

As to whether this current situation is actionable, I would note that there's an utter disconnect going on with respect to the value of E&P stocks heavy on gas production. Despite the collapse in the commodity, these stocks are near recent highs.

I have not done anything yet, but I'm taking a close look.
< Previous
  • 1
Next >
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE