Tuesday, June 01, 2010

Natural Gas (UNG) - Update


I've been long UNG (Natural Gas ETF) but took the trade off today because of the bearish engulfment that developed.  About 9 days ago we had another bearish engulfment and over the following week UNG sold off.

UNG has been in a trading range over the past two months which means I am wasting my time trading this ETF. I'd rather trade UNG when it starts moving than to sit in it hoping for something to happen. I'll leave this market alone for now.

11 comments:

Anonymous said...

are you kevin brown of swing trader guide?

Kevin said...

no

Anonymous said...

I also got out yesterday, but involuntarily: Stopped out at a small profit. It gapped up today of course. UNG makes me uncomfortable though. It's track record is horrible. The only good thing is no option premium whatsoever.
Jacek

Kevin said...

UNG has been a real tough market to trade. Even if Natural Gas Futures rally, UNG finds it difficult to move higher. I think there are better markets to trade than UNG.

Anonymous said...

UNG is a horible stock! i realy belive its not connected to natural gas what so ever! i belive some day they are going to be sued by investors. it smells very very bad!
i follow the stock since it was 16$. very very fishy.

Mike Truong said...

OT:

gold and silver are showing divergences from equities. Normally even if gold diverged from equities, silver have been pretty good at forecasting the move in equities. With the massive rally yesterday and the possible continuation of the rally Thursday and possibly into Friday, that silver hardly move give me pause about staying too long on this bounce.

Anonymous said...

Mike,
I disagree. Look at a longer time horizon. GLD and SLV are coming from a major top and SPY from a major low. We had a similar script in March 2009.
Jack

Anonymous said...

Coming back to UNG. I reached 7.8 today. 7.7 was my target, but was stopped out even before that. That's life!
Jack

Anonymous said...

Kevin, it seems that you may need to get back in this trade. UNG is pushing against resistance today with increased volume, looks like it will do something to the upside. High probability that the bearish engulfment has been negated.


Costas

Kevin said...

I totally messed up this trade. One thing I always talk about is to wait for the engulfment patterns to be confirmed by breaking the low of the engulfing day. That never happened so I really should have stayed with my long position. Obviously I screwed up.

Anonymous said...

I screwed up the trade too. Instead keeping the original stop, I got greedy and upped the stop some to get some profit. The stop executed below the activation and I got even.

I used in the money june $5 call as my instrument that traded with little or no time premium at all. Last time I checked it today, the time value was -9 cents. How is it possible? and what does it mean?

Jack

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