Wednesday, June 3, 2009

Volatility in Oil and Gas Continues

This rally in oil and gas has been mostly speculation, and although it was oversold a month ago, is probably now too high for the current economic outlook. There has been massive speculation in the US natural gas fund, as everyone seems to be trading it. I've discussed the reasons why I think natural gas will be much higher in the next few years, but in the near term, this is a trade only. We keep seeing these "false starts", and then come back to reality, but money can be made on these moves. Below 14 UNG is a good buy for a trade or long term hold. It dipped below 13 just briefly earlier this spring but has twice rallied to 16 or higher. Volume has been massive, and with no clear pattern and high volume, this says lots of traders and lots of speculation to me. That's okay, but as long as we know that going in. I will be buying back into UNG soon, and will post when I do.
Disclosure: No Position

1 comment:

Fixed Index Annuity said...

More updates are required.