Here is a long term monthly chart of Nat Gas. The price is at
the point now that it is becoming unprofitable for many wells with
a higher cost of production. I would guess downside risk is still
pretty sizeable, percentage-wise. Given UNG's poor tracking record
and nat gas stocks that are not priced real cheaply how would you
play this for a long term trader?
Posted by parkridge77 on 20th of Mar 2012 at 03:45 pm
Hoshour- I don't know what the macro chart technicals are
reflecting-
BUT nat gas pricing has been unprofitable for gassers for at
least a year now, if not longer. So significant downside has
already been priced in here & I am looking to see more softness
into summer, but keeping my eyes peeled for a bottom sometime this
year. In inidivudla ticks I follow- I am thinking about 10% more
downside would be a good entry-- I like RRC at 51 for example-
would be long term for me-- which is years & years if it holds
up. I don't trade gasser etfs-- but I did read once UNG hits
24 & manages to stic- a pricing recovery could be in
play.
I think the break even for most gassers is $4 range. Many
were drilling only to keep leases . Storage is beyond record highs-
not good. Now eyes are on the nat gas rig count which is
finally dropping-- CHK & others have FINALLY shut in more
wells . That should help.
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Nat Gas Long Term Chart
Posted by hoshour on 20th of Mar 2012 at 03:25 pm
Here is a long term monthly chart of Nat Gas. The price is at the point now that it is becoming unprofitable for many wells with a higher cost of production. I would guess downside risk is still pretty sizeable, percentage-wise. Given UNG's poor tracking record and nat gas stocks that are not priced real cheaply how would you play this for a long term trader?
Hoshour- I don't know what
Posted by parkridge77 on 20th of Mar 2012 at 03:45 pm
Hoshour- I don't know what the macro chart technicals are reflecting-
BUT nat gas pricing has been unprofitable for gassers for at least a year now, if not longer. So significant downside has already been priced in here & I am looking to see more softness into summer, but keeping my eyes peeled for a bottom sometime this year. In inidivudla ticks I follow- I am thinking about 10% more downside would be a good entry-- I like RRC at 51 for example- would be long term for me-- which is years & years if it holds up. I don't trade gasser etfs-- but I did read once UNG hits 24 & manages to stic- a pricing recovery could be in play.
I think the break even for most gassers is $4 range. Many were drilling only to keep leases . Storage is beyond record highs- not good. Now eyes are on the nat gas rig count which is finally dropping-- CHK & others have FINALLY shut in more wells . That should help.