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  • UNG, Uptrend Emerging? 1 comment
    Jan 15, 2014 3:57 AM | about stocks: UNG, XON, STX, SCTY, TSLA

    While I can't predict the fundamental aspects of supply/potential export/LNG, and the effect on pricing, (I can call it upside), there seem to be some alluring properties to UNG.

    First of all, I think it favors a stronger dollar. This may or may not be the case, but it doesn't always move with other commodities, which generally like a weak dollar. It also doesn't necessarily move with markets, which allegedly like a weak dollar, and happen to be up 70% since 2011 lows. Still, UNG may not dislike a weak dollar. The fact UNG is kinda roving in the financial breeze can be refreshing with so many other assets prone to correction or continued breakdown in metal's/oil's case. Plus, things have been chippy, with roiling currencies like JPY (making the dollar strong).

    Second, it's had a strong downtrend for many years, and with parts of 2012/13, reasonable stability.

    These are reasons to non-short UNG, at least, but maybe not enough to call an uptrend. However, one trend we do have is technology, and a 2 year old could tell you that much. With tech, and its proliferation we can see everyday, it seems as though there's a monster in the closet growing at least equally exponentially. That's right: big data. Now there are many ways to view this or size it or some data available somewhere, probably on a cloud server, but the STX chart is handy:

    (click to enlarge)

    and its ridiculous. This is like a classic chart you know is best not to buy, with horribly over-extended MACD/RSI and looking completely pegged, but also the one you know you'll be kicking yourself for not buying when it's $120.

    However, it seems like STX can be a friend to UNG. After all, those spinning disks run on something. While linking the two too directly will yield massive investigation and inconsistencies, generally we can see that the power savings granted us by all our power efficient devices may not be power savings after all.

    And lets not forget TSLA, which don't run on gas! Or.. wait. I meant premium unleaded.. you get the idea.

    So, if there ever was a time for UNG to finally not fall or be a horribly choppy mess, I'm not sure there's has been a better one, after it's done the former two for a good long while.

    In theory this should show up in the UNG chart. And UNG did make an awesome power move for a month and a half starting November. I told myself I'd buy any pullback, and lo and behold, weather!! Dang weather! It sure gave a pullback while many were scared by the stupid excitement over the weather.(click to enlarge)

    Weather is not a trend! If it was, weatherfolk would be more reliable. No offense weatherfolk :) If UNG was tied to the weather, even algo's and hedgefunds could lose, and it just wouldn't trade much because everyone would know its doomed.

    Tech is a trend, solar is emerging as a trend, and even XON bought a huge stake in UNG in 2008 via Exco. Exxon is starting to look like a trend. UNG is no STX but there are signs it has stopped worrying with the weather and that there's actually something going on that is trend-like, which happened to be revealed by conveniently bad weather.

    It's only a second and somewhat inferior idea to my now-beloved AMD, for which I'm far the nerdier :) but UNG isn't a short and that's a start to it becoming a good long. Now if it continues for maybe a few more hours it would start to look something like a trend.

    Stocks: UNG, XON, STX, SCTY, TSLA
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  • Jerome Verony
    , contributor
    Comments (43) | Send Message
    XON = Intrexon
    XOM = Exxon
    26 Feb 2014, 10:29 AM Reply Like
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