Natural gas took another beating on Monday, dropping by over 5%. As it comes crashing down, many investors have asked me where I would buy the commodity. More specifically, the UGAZ, the 3X Long Natural Gas ETF. When it comes to finding major support, I always look at the single ETF. This is because it does not lose such massive value over a small period.
As everyone should know, all triple and double ETFs always head to zero quickly. They are only short-term trades. For natural gas, I analyzed the United States Natural Gas (NYSE:UNG). It is trading at $7.80 but does not have major support until it gets into the $7.00 to $7.15 range. Once UNG gets to this range, I will be a buyer of UGAZ, expecting a sharp bounce that will multiple my gains 3X. This will be a quick bounce and not something you want to marry for months.