Hamilton's E-Wave Analysis

Natural Gas and HNU

NATGAS - apr 2012

Natural gas just keeps going. In commodity circles this is known as “trend persistent” maybe even a little obstinate. In any event a nice A-B-C down is complete and then some and both the RSI and MACD are heralding the possibility of a change. This is relatively sure bet, if for no other reason that there is only $2 of downside left. To play it one could use the HNU, or GAS ETF’s. The HNU is more sensitive to roll-over risk if the markets stay in contango. Both come from great heights (but prices are adjusted!)

We prefer the Claymore  ETF as with a little imagination a count can be put on it. Summer is coming and that is actually the period when most gas is used (air-conditioning), so maybe this is the time. For the record, we have been wrong on this one before!