HBP NYMEX Nat'l Gas Bull+ (HNU.TO)

This is a very interesting one. People buy these things and everybody has been waiting for natural gas to do very, very well. Feels you have to look a little bit beyond this one.

This is a Double Bull, so remember that for short-term trading it is fine. He has no idea where natural gas is going to go for the next 2 weeks. We are into the summer months where we are past the shoulder months, so you get the weekly supply/demand indicators that can whip the price around $.20-$.30 pretty easily.

Storage is low in Nat Gas. Long term he likes it because of the dynamic of it burning cleaner. HNU-T is not what you want to trade for long periods of time because of rebalancing. Prefers FCG-N (large caps, diversified portfolio). Or ZJN-T is a bunch of juniors in Canada. You can hold them for a long time.

US inventory number on Nat Gas tomorrow. HNU has done well because of cold weather. We had a little move higher in Gas itself. The issue is with the ETF. It is a short term play on Nat Gas, so don’t hold it long. You would be better buying the Nat Gas ETF rather than this leveraged one if it is for a longer term hold.

This has really spiked. If you are on the right side of this, you can make an awful lot of money, but you have to remember that with any of these things that are leveraged, it may be time to get out. Don’t look at this as anything more than one week old.

He is bullish on Natural Gas. It is not a long term investment but not a buy and hold product because it is dealing with continually buying new futures. Leveraged vehicles are not buy and hold products.

The thing about a leveraged ETF is that just because the underlying is moving in a particular direction on a trend, it doesn’t mean that your leveraged vehicle is doing the same thing. These are rebalanced every day so it is a brand-new trade every day. It’s a day trader so trading this you need a pretty tight Stop.

Still a gas surplus because of the success in drilling and fracing so natural gas prices have been under pressure. Much more profitable to drill oil at this point. Almost all natural gas produced in North America goes for space heating so you need a cold winter. Over the longer haul, we are going to start exporting out of North America and that will be a very good business. Some of these plants are only just being built while others are still in the planning stages.

Leveraged 2 to 1. Over long periods of time, if it is choppy, there is NAV erosion. He thinks Nat Gas will ping pong for the next year. Don't hold for long term.

Nat. Gas: Big warning: HNU is not the thing to hold for a long term for Nat. Gas. Look at 5 year chart of stock. It is the worst thing to hold long term. Fine trading vehicle to add some leverage to your trading short term.