5 reasons to be bullish on Natural Gaz / $UGAZ
1. Natural gaz is very weather dependent and seasonal. In the last 20 years, natural gaz went up 14 out of 20 times between Aug and Nov. The exceptions were (2000, 2005,2008, 2010, 2011 and 2015).
2. In the last 20 years, natural gaz was above $2.25 98% (eye ball) of the time. As you can see on the chart, $2.25 is a clear floor.
3. Adjusted for inflation for 20 yrs at 1.5% inflation rate, this floor should be in the $3.00 range in 2019.
4. Average price in the last 20 yrs has been around $4.50 ish. There is lots of room above!
5. With the FED's dovishness, the dollar will start softening soon. It may creep up a few more days but it will come down. Commodity will then have upward price pressure.
The price is falling at the moment. I would like to see it stabilize first but this looks like a pretty good odds trade to execute some time in August, below $2.25. The question is, ...How low can it go? My advice, keep an eye on it...
The above are only my opinions and are not a trading advice. This is just something to get you thinking... an idea, THAT'S ALL! I am not responsible nor liable for any financial losses you may incur following my ideas. Also know that leveraged ETFs such as UGAZ carry additional risks. READ the prospectus! Do your own analysis and due diligence PLEASE!
Good luck to all!
2. In the last 20 years, natural gaz was above $2.25 98% (eye ball) of the time. As you can see on the chart, $2.25 is a clear floor.
3. Adjusted for inflation for 20 yrs at 1.5% inflation rate, this floor should be in the $3.00 range in 2019.
4. Average price in the last 20 yrs has been around $4.50 ish. There is lots of room above!
5. With the FED's dovishness, the dollar will start softening soon. It may creep up a few more days but it will come down. Commodity will then have upward price pressure.
The price is falling at the moment. I would like to see it stabilize first but this looks like a pretty good odds trade to execute some time in August, below $2.25. The question is, ...How low can it go? My advice, keep an eye on it...
The above are only my opinions and are not a trading advice. This is just something to get you thinking... an idea, THAT'S ALL! I am not responsible nor liable for any financial losses you may incur following my ideas. Also know that leveraged ETFs such as UGAZ carry additional risks. READ the prospectus! Do your own analysis and due diligence PLEASE!
Good luck to all!
Comment:
Just an update... Took half a position of UGAZ at $12.75 stop loss at $12.00. Intend to average up at $13.25 (yes, I am averaging up, not down!) or try again later this month at a lower entry price if my stop gets triggered.
Trade closed: stop reached:
That was a nice pop today! Maybe a bit too strong not to pause and take some profits. I'll be looking to accumulate at lower price when the price will surely retest the low. Such a big pop at this time of the year is a bit unusual and there are no real reasons behind it other than shorts taking profits.
Comment:
Sorry, above should not say stop reached but profit taken and looking to reenter.
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This week was wild. I made money on UGAZ and DGAZ. We had huge and sudden spike then a new low on NG. I was a bit too early to accumulate for the winter. Looking for another new low and then...
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Bought BOIL January calls after NG dipped below $2.05 yesterday. Will add again should it dip again.
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My BOIL calls are doing alright. I can be patient on those, I have until December (not January as stated before).
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Natural gaz is moving faster than expected. So, my calls are doing great! However, the big bucks are in October and November. Still looking at opportunities to accumulate more should it dip.
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We'll see in the next couple of weeks but I may have bought those calls close to the bottom. I am still looking for opportunity to add more should it drop... I am monitoring it...
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Natural gaz seems to wake up!
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It may be just because Dorian but it also hopefully is the beginning of the September October rise in price.
Comment:
Nice rally with NG! Tempting to take profits but the real seasonal pop is usually in after October. I am willing to see it go lower in between in order to be positioned for the real McCoy!
