Morning Update Feb 3, 2020

Be patient, but not too patient? So fundamentals are boring from my vantage point. I so no major changes. Weather forecasts continue to show some consistent cold, but nothing major. I suppose this could justify $2 gas. But if near term history repeats, these cold signals will not last, at least not to the degree they are being forecasted as currently. With that said, production is still stalling, but the market is still slightly oversupplied. So should I reduce or should I hang on for the ride? Lets look at my positioning.

UNG, including my average position in Webull

My current Average is $15.58 for UNG and I have the 1 purchase of UGAZ at $46.75. The original plan was to layer into UNG until the market turned or I ran out of funds. Part of that same plan was to start converting shares of UNG to UGAZ once I ran out of funds to buy UNG. It appears I am in the midst of a potential turn, though I do not expect much here. Adam Mancini placed a target on NG at $2.04. I like the idea of this target price, and it would be enough to pull UNG above $15.58. However; I don’t agree with this price. I feel the market has had small chances for the price to advance some and has failed every time. With this idea, I feel I should reduce.

Another issue that I have not yet addressed would be settlement period for the account I’m using to trade in. My Webull example account is not a margin account, so I may have to wait for funds to settle before I can buy with unsettled funds. I need to find out what happens when I sell shares. Since the original plan was to wait to buy UGAZ, I’m going to reduce UGAZ now at $46.27.

Account example with Unsettled Cash and Buying Power

So I just sold my UGAZ at a small loss, that’s ok. If the price falls, I’ll get it back, and possibly more. I now know I can sell and re-purchase in the same day. My buying power is equal to what I just sold (unsettled cash), plus my Settled Cash. I should still be careful, because most likely I can buy something today, but cannot sell it today due to Unsettled funds. I should probably write a lesson about this for the education portion of the site.

Anyway, I’m going to continue with the original plan, hang on to UNG, only converting to UGAZ if the price falls to my next mark. Someone asked why $14.4 for my last purchase price of UNG. From the beginning, I wanted to be “All-In” UNG when NG got to $1.85, and $14.4 is roughly the equivalent to $1.85. Why not wait to buy all my UNG at that price? Well because natgas is full of surprises and the price may turn around above or below $1.85. So I set up to layer into UNG, of course with the hopes that I will at least recoup my full investment and then some. Would you look at that, the moment I sell UGAZ, it turns and goes higher. Haha

Back to my target… I believe UNG could get back to $15 this week, and I’ll be happy to reduce back to 80% holdings in UNG at that point. Looks like I’m out of time. duty calls…

I’m now out of UGAZ and will place a limit to sell the last portion of UNG that I bought at $14.4, putting me back to 80% in UNG. The limit will be placed at $14.98. I believe there will be more opportunity to trade the noise, so I want to take a small chance on that happening. If the trend takes over and prices move higher still, I’ll have 80% of my funds in UNG to ride it up. Good Luck


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