Replies to post #3461 on Velocityshares 3X Long Natural Gas ETN (UGAZ)

[dude iligence]

Where have you been for the last 2.5 weeks. I made my recommendations on Feb 6 post 3043 when I bought UGAZ at $2.5 because I recognized a bottom forming. There was 2 days of $2.4-$2.5. Post 3040 and 3255 I recommended buying the $2.66 dip as well after the run to $3.1. Now the price is $3.24 been as high as $3.6's 40-50% move up from the low. Post 3454 has all the charts needed to track NG UGAZ current action. The battle lines are drawn and UGAZ is trading in between support at aprox $3.2 and resistance aprox $3.48 can be seen in the chart below. This corresponds with NG mid $2.8's support and $3 resistance aprox. Most likely NG stays stuck in that range until Thursday at 10:30 est. The $3 level on NG also corresponds to the 50ma. For NG to move higher it has to get above the 50ma close and stay above it. Is there enough cold wx days remaining for that to happen? Rig count drops will affect production, how soon. Production report comes out of Friday.


My advice is use stop limits on 3x etfs. You get on the wrongs side and losses can build quickly. I got caught in the UGAZ gap down from mid $8 to $7 then it went to $6. Stopped out but not pretty. What's important is I'm not making any decisions about UGAZ or NG based on that loss back in Dec. Why because I didn't hold the position so its not staring me in the face every time I open my account. It became a loss to offset gains for 2014 taxes. If you free up the cash it can be used in its entirety for a new trade. That way your not worried about averaging down and holding for a bridge to far, trying to get all the way back green. The way NG has been trading in ranges you can make small trades within the trend using either DGAZ or UGAZ.

[Schneidku40]

Eek why didn't you take your loss sooner? These leveraged ETFs aren't usually something to hold onto for very long. I just accept the loss and live to fight another day when I have a better handle on the trend. If you lose 10%, you only need to reinvest that money and get an 11-12% return on the next investment to get your money back. But if you lose 50%, you need a 100% gain on the next investment. 11% is much easier to achieve than 100%. Averaging down in DGAZ worked for me the one time I did it but I was real nervous the whole time. Good luck. I do think UGAZ goes up from here at some point before winter is over.