Why natural gas prices are heading record low every morning ?
I have been tracking HNU.TO and GAS.TO since last 6 months and they keep sinking... I know its because of natural gas is going down... I wonder why is it going down while other commodities are doing well... Companies like EnCana and Enbridge stocks haven't followed the general upward market trend because of record low natural gas prices..What is the future to invest in to natural gas ETFs ? Is it a right time to get in ?
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Originally posted by ashedfc
Quote:
Originally posted by jigz787
Why natural gas prices are heading record low every morning ?
I have been tracking HNU.TO and GAS.TO since last 6 months and they keep sinking... I know its because of natural gas is going down... I wonder why is it going down while other commodities are doing well... Companies like EnCana and Enbridge stocks haven't followed the general upward market trend because of record low natural gas prices..What is the future to invest in to natural gas ETFs ? Is it a right time to get in ?
Stay away from this commodity "Unless you are a day trader".
Natural gas is running enormous over-supply, much higher than the demand. Horizontal multi-fraction technology has created abundance of this commodity, & we are not in winter yet (so even the winter heating demand is absent). Its the fundamental which is pulling it down.
Ideally, that should be the “right reason” to buy HNU or GAS. However, as I understand (and I am NOT an expert on this), ETF attracts “contagion” and hence the price fluctuations in ETF are not in proportion to NG price fluctuations. It is very difficult to hold ETF for say 4 months and gain when winter hits. Exxon made big acquisition (XTO) and that is the very reason market shuns Exxon. Likewise Reliance has also made a few NG acquisition. The latest Reliance effort with Cheaspeak was snatched by China. Till Obama makes sincere effort to push NG as auto fuel, there is little hope for that sector to recover
Quote:HNU is a double leveraged ETF, isn't it?
Originally posted by Nightmare
Ideally, that should be the “right reason” to buy HNU or GAS. However, as I understand (and I am NOT an expert on this), ETF attracts “contagion” and hence the price fluctuations in ETF are not in proportion to NG price fluctuations. It is very difficult to hold ETF for say 4 months and gain when winter hits.
They simply track the daily price movements, times the degree of leverage and isn't an investment vehicle.
As ashedfc said above, use this only for day trading.
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"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."
-- Rhett Butler in "Gone with the Wind"
I agree about HNU.
But what about companies in Natural Gas exploration/distribution/production business ....?
Is the record low NG prices already factored in stock prices ? If so, when NG goes up , those company stocks should go up as well.. right ?
Location: INDIA (sometimes Canada)
Posted on: 26-10-10 13:32:59
I was also of the view that it is time to invest in Natural Gas and companies dealing in it.
But a few months ago follwoing the advice of our fellow CD's < "pratickm" and "ashedfc" > I avoided it. Also, I am follwing it in TV and in news since many months.
Natural Gas is going to stay at these lower levels in short to medium term.
Also, refer to this post http://www.canadiandesi.com/read.php?TID=29039
to learn about the working of ETFs. In this thread our fellow CD's < "pratickm" and "ashedfc" > have provided few links to the working of ETFs providing valuable information.
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Enjoy Happiness -- Happy from India
Is this good or bad ?? I think its a bad sign... right ?
Important message for clients holding HNU.TO, or who had an open order for HNU.TO >> please be aware HNU.TO has undergone a consolidation. All orders for HNU.TO placed before 4 p.m. ET on Friday November 5th, have been cancelled by the exchange. All online orders placed today for HNU.TO will be reviewed by our trade desk. If you have any questions about this process please contact us at 1-800-000-1234
