Natural gas prices and exchange traded funds (ETFs) have languished as supply far outstripped demand – until now. In the last two weeks alone, the largest natural gas ETF is up more than 12%.
The United States Natural Gas Fund (NYSEArca: UNG) has been trading higher nearly every day this week and hitting highs not seen since March, reports John Spence for MarketWatch. The fund is still down around 25% year-to-date, though. [ETF Strategies for a Natural Gas Rebound.]
UNG was an investor favorite for shorting during the last year as the fund was stuck in contango with the ETF selling the front month at a loss while it rolled over to buy next month contracts, remarks The Trader Next Door for Traders Huddle.
After Thursday’s trading, the fund broke through its 50-day moving average. Some short covering in the sector may prompt UNG to set a new trading range as it pulled out of its long downtrend, adds The Trader Next Door. It’s got almost 20% to go before the key 200-day moving average crossover. [How to Follow Trends.]