Investing.com - Financial Markets Worldwide
🎁 💸 Warren Buffett's Top Picks Are Up +49.1%. Copy Them to Your Watchlist – For FreeCopy Portfolio

Time To Light Up The Natural Gas ETF Again?

ByDeron Wagner
Published 10/09/2012, 01:08 AM
Updated 07/09/2023, 06:31 AM
NG
-
UNG
-
UNG
-

Last week, on October 2, we locked in an 11% gain on a swing trade in US Natural Gas Fund (UNG), a commodity ETF designed to roughly track the price of natural gas futures contracts. As you may recall, we sold the ETF into strength as it came within pennies of our original upside price target.

In the following day’s ETF commentary in our newsletter, we said we would be looking for a potential, low-risk re-entry buy point into UNG. Specifically, we said, “Even though we have closed this trade, UNG could still move much higher in the intermediate-term. The rally over the past week was a breakout above a valid base of consolidation, which could set into motion a new intermediate-term uptrend for this ETF. As such, UNG is now on our radar screen for potential re-entry after it either pulls back or forms a bull flag chart pattern. There is a good chance we will be able to re-enter the trade at a slightly lower price, or possibly near the current price, but with a more positive reward to risk ratio after UNG undergoes at least a near-term correction.”

Since then, UNG has indeed formed a bull flag on its daily chart. As such, we are now listing it in the ETF watchlist section of our newsletter as a potential swing trade re-entry. Since it is a commodity ETF, it’s a bonus that this ETF has a low correlation to the direction of the main stock market indexes, which may be headed lower in the near-term.

Below, we have annotated the bull flag chart pattern that we were anticipating to subsequently develop after exiting the trade on October 2:

UNG


Original post

Latest comments

Loading next article…
Install Our App
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.