Wednesday, September 2, 2009

UNG Time (About Time)!

UPDATE: New UNG chart at 3:15.

NOTE: As I did this post I had to move the fibs DOWN three times to keep up with the fall. Amazing.

First let's visit the United States Natural Gas Fund Site HERE. This is where you need to read to understand this investment if you have not read about it. There you can find the NAV of UNG as of the close yesterday $8.70 and price closed at 10.27. That would be a 15.29% premium to NAV. That has to correct. That will keep downward pressure on the price. I'm not gonna rehash the rest of the story.

First chart is UNG and Oil. The historical price relationship should be restored eventually. How this happens is any one's guess. Right now I'm thinking Oil will be doing most of the work.

The next chart is a new 30m chart I threw together today realizing we all needed a little better drill down than I was providing. All I can say is that UNG appears to be oversold based on all indicators and has been for some time. The move over the past three days looks capitulative to me. Too steep and totally parabolic right now. The problem is I am not about to recommend a buy. I just can't. If you should trade it, please, 10,000x please use stops and have a strategy.

It will correct at some time in the future and that will be a good winner, but if you have been averaging in all the way down you are in deep shit. I started buying at 23 and got out at 19. Have not touched it since. Don't plan on trying to catch this falling knife. You bottom fishers waiting, I have one question - Do you feel lucky? Well, do ya PUNK?


  1. Nice post Shank. Been busy but I am back!


  2. Welcome back Sir! Hope you are safe and well. Thanks for all you do.

  3. Shanky...Quite the opposite of feeling lucky. UNG makes me feel very stupid.


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