For investors seeking momentum, United States Natural Gas (UNG - Free Report) is probably on radar now. The fund just hit a 52-week high and is up more than 42% from its 52-week low price of $20.40/share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:
UNG in Focus
The underlying index of the fund looks to reflect the daily changes of the price of natural gas delivered at the Henry Hub, Louisiana. This is done by tracking the price of the futures contract on natural gas on the NYMEX that is the near month contract to expire, except when the near month is within two weeks of expiration, in which case it will be measured by the contract that is the next month contract to expire. The expense ratio of the fund is 1.30% (see all Energy ETFs here).
Why the Move?
Seasonality plays an important role in natural gas prices. Natural gas prices spiked on Monday. The forecast of colder weather in the United States and higher-than-expected heating demand from Nov 9 through Nov 18 boosted the price.
More Gains Ahead?
It seems that the fund might stay strong given a positive weighted alpha of 22.90. There is still some promise for investors who want to ride on this surging ETF.
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