Wednesday, March 17, 2010

A pain in the gas...

Last week I started thinking about natural gas plays. Cramer has been trying to pump up nat gas for a while now. For me, there are two ways to play this: either the NG gas futures or the UBS ETF, symbol GAZ. Here's its daily chart:

Now, normally this is the kind of chart that gets my attention. This poor stock has been beaten down hard lately. And unlike a company like Eastman Kodak, its main product cannot be made obsolete overnight by computers. But I got singed recently trying to catch the falling knife in gold (I bought AUY at 10.17. Had I waited another day, I could have had it at 10). So I started waiting for a bottom in GAZ. And waiting... and waiting... I'm still waiting.

So what's up with nat gas? Here's a nice article from Seeking Alpha that helps explain why gas is on the floor. (Executive summary: oversupply):" (for some reason, Blogspot doesn't want to insert links, so you'll have to cut&paste this - it's worth the effort).

As a long term investment, you could probably do worse than gas. Is now the time to buy? Not yet. Like I tell my tell my dog when we're out on a walk and she starts to sniff something smelly, "Leave it!" Even as a short, that bus left the station a while ago.

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