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Here's How To Play The Natural-Gas Plunge

Published 01/09/2017, 02:42 PM
Updated 05/14/2017, 06:45 AM

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.

Daily United States Natural Gas Fund

Latest comments

I am buying UNG calls when it starts to improve.... currently holding puts.
seems like money for free for everybody MR. Smart lol, the plunge wont stop till NG reach 1.5$
Look at the major support of the last three plunges. they have all been slightly higher than the support previously so theoretically there could be support above 7.00
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