This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Sell Natural Gas Into Resistance

Stock quotes in this article: GLD, USO, UNG

NEW YORK ( TheStreet) -- The average retail investor may follow the SPDR Gold Shares (GLD) exchange-traded fund more than oil or natural gas, but oil is probably more pertinent.

Investors who own a car require very little convincing of how the price of oil impacts their daily finances. You can follow the price of oil through the United States Oil (USO) ETF. Even if you don't own a car, it's easy to see how oil prices matter to you. Everything you buy is either made from oil and/or delivered to the store you purchase from.

Both GLD and USO have recently made new lows for 2013. What may surprise you after viewing an oil or gold chart is that natural gas is not only making new highs for 2013, but new 52-week highs, as measured with the US Natural Gas (UNG) ETF.

If you live in Wisconsin like me, it doesn't take long to figure out why natural gas prices have climbed so high. Normally during this time of April, the winter's snowfall has long melted. This year, we have had winter snowstorm warnings as recently as April 21.

I haven't seen a day yet in 2013 with a daily temperature over 50 degrees. More of my lawn is covered with snow than grass.

If you love summer more than winter, it's downright depressing, but not for the price of natural gas and UNG. The daily chart for UNG says it all. As long as winter will not leave, natural gas prices will not fall; however, time is not on the side of the natural gas bull.


We all know summer will come, but in the meantime, the amount of working natural gas underground storage (short-term storage) continues to decline and is significantly below the year-ago and the five-year average.

Overall, natural gas storage reserves are 32% below last year's levels. This becomes even more compelling when you consider that the overall supply and production this year are above 2012 levels. If you understand supply and demand curves, you realize that prices can remain higher than normal as long as either supply is reduced or demand is higher than normal.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,804.71 -238.19 -1.40%
S&P 500 1,946.16 -26.13 -1.32%
NASDAQ 4,422.0850 -71.3050 -1.59%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs