Larry Berman CFA, CMT, CTA 1stTr ISE Natural Gas E.T.F. FCG-N BUY ON WEAKNESS Dec 12, 2022

Larger Nat Gas cap weighed companies. Play the whole sector. You get diversification.

The price of Nat Gas has been flat the last 8 weeks. A break above $4.02 would complete the pattern. Until the third week in December the price goes higher for Nat Gas stocks. This is an ETF of gassy stocks. We aren`t at the end of August yet, but we are awfully close.

(Top Pick Aug 22/14, Down 5.04%) Nat Gas is up 4-5% and yet gassy stocks are down 5%. Make sure when you make your calls that you go into the right products. We are still in a period of seasonal strength, but need at least two of the three technicals to be positive.

The most actively traded ETF in the gassy sector. On a technical basis, natural gas started to show early signs of outperformance relative to the market.

(A Top Pick Sept 4/15. Down 8.67%.) Seasonality did come into the sector right around the end of August, and normally goes right through until the 3^rd week in December. However, this year we have had warmer than average weather in the eastern part of Canada and the US, and natural gas prices have come down quite significantly. The sector right now seems to be trying to bottom out, but the technicals are not there right now. There are lots of better opportunities elsewhere, so if you own, Sell.

(Top Pick Sep 4/15, Down 10.79%) Seasonality does not work all of the time. You have to get out of bad seasonal trades when they aren’t working. When it looks shaky, just move on. The US dollar coming down will be good for Nat gas.

Recently, this has been forming a base pattern, which is typically of what would happen around the 3^rd week of September and moving higher until the middle of December. Natural gas has been forming a nice little base pattern, and a couple of days ago moved above that very briefly. Usually, the stocks themselves, don’t move that quickly. We are not quite at the 3^rd week in September, so currently the securities are forming a nice base pattern. Natural gas inventories in the US are right around where they should be on a 5-year basis, however, there are 2 hurricanes going into the Gulf, which is the largest natural gas producing area in the US. Because of this, in the next few weeks, natural gas inventories will not be building quite so much.

Natural Gas. FCG is a way to play the concentrated natural gas. Would stay away from playing the commodity futures part such as with UNG. This is in a challenging market. If you are bullish on the energy outlook, would play it with FCG.

Good way to get natural gas equities exposure. Better option for long term investors than leveraged ETFs.