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10 pts

Opinion on  United States Natural Gas Fund LP (UNG)
start your engines

Jul 22, 2009 05:06 PM GMT
Anything
Return Risk
+8.27% HIGH
Sr. Associate

So NG is so cheap on the spot market right now, you can buy a bunch of it, store it, sell the long-dated futures, and pocket the margin. Got a tank in the back yard? It really doesn't matter for longer term investors whether we have a warm winter this year, or how much gas in the storage tanks overflowing. What matters is, a cheap commodity automatically sparks demand. Whether this comes from utilities building more gas-turbine plants, or people using NG cooking grilles and golf carts. At some point, the market corrects. This commodity has the capability of really spiking hard. Also, as a bonus, somehwhat-related oil prices have doubled off the bottom; whereas NG has seen no love. This won't last. Bring on the LNG-powered machines brothers and sisters. You wanted green power didn't you? Here it is, staring you in the face.


UNG:  This call was made on 07/22/09 @ $13.88
Rating:   Positive   $13.88 (07/22/09)
Closed:   10/07/2009 @ $12.002 (-13.53% in 77 days)
Target:   $55.00 (+296.25%) in > one year


Comments (2)

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globe32   N/A     1 point   commented 93 days ago reply

With UNG approaching $10.00 in a free fall (along with natural gas prices) the optimism above was premature, but the facts in the article still remain true. Even as there is FEAR about UNG and possible upcoming regulation of Etf to prevent speculation investing, the fact is that the UNG and NG still follow each other closely.
FEAR is always a good time to take advantage of the panic sellers because NG will go up(after it goes down.) Everything does. Timing is not known. Investing for the long term in a aura of Fear Selling could make for good profits, if you have the stomach for it. NG and UNG "are" really volatile. Just as it spiked down..it can spike up. Hurricanes, a cold winter, disruption in supplies etc. However, we ARE in a recession still and even oil is expected to be in less demand.

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utopius   83%     1 point   commented 58 days ago reply

This was an idiotic recommendation on my part. UNG is flawed security. Since July 22, 2009 when this recommendation was issued to buy Natural Gas, the October 2009 contract traded from $4.00 to about $4.00 when it closed trading. The November contract traded from $4.65 to about $5.00 today. But UNG lost money, big time. I won't bother explaining how UNG works, but suffice it to say you should NEVER buy this security, there's a better alternative-- ALWAYS. I'm closing this position for a loss, and I deserve the loss for such a dunderheaded pick.


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utopius previously rated UNG
Negative +20.20% Flawed Security-- it should never be bought
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