HNU - Horizonz BetaPro Bull Nymex Natural Gas ETF

The Claymore ETF- GAS had a 9% gain today without the leverage.

I'd want to go unleveraged with natural gas too... thanks for pointing out GAS aww1970

gotta agree with marty I was looking at HNU a while ago and I had to pass it up, the leverage decay is killer. I think a 1x will be good even though its seasonal weak demand for gas if oil rises it will follow

Do you think a play like ATI or QEC would be a safer bet to go with than playing these ETF's?
I think it is time to look at which way to go. I have been watching QEC myself and thinking about it as an option once gas starts to get going but I am undecided on which way to go. Once the gas starts to go green it might be a great way to make a good $$$$. It has been pounded down for a long time now

swing trading strategy at 10:30 on Thursday

Ok, I have been studying the trend of Natural Gas for a few weeks now and found a quick way to "theoretically" make a quick buck. It's theoretical because I've only done it on paper never with real money.

The two stocks in play are HNU.TO - Horizons NYMEX Natural Gas 2x Bull and HND.TO - Horizon 2x Bear. (just remember U for Up and D for Down)

These two ETFs track NYMEX natural gas so it's the leveraged version of UNG. It's similar to FAS/FAZ for natural gas instead of financials.

An important fact is that every Thursday at 10:30 AM the EIA (Energy Information Admin) release the storage of Natural Gas in America for the week previously. here

The storage is MATERIAL information to the price of Natural Gas. If supply is high then the price will decrease and vice versa.

What I find is that exactly at 10:30 AM very Thursday when the storage information comes out, it causes the prices of HNU and HND to swing wildly in opposite directions.

What I propose is this:

At 10:29 AM, put a 1% TRAILING STOP LOSS BUY on both HNU and HND. A trailing stop buy will execute when the price goes up.
At 10:30:00 AM information is release.
Only one of the TRAILING STOP BUY order will be filled because these ETFs move in opposite direction. Once one order get filled you can close the other.

Here is a real life example for last week:

Thursday June 18, 2009

At 10:29 am the prices of
HNU - ranges from $7.49 to $7.51
HND - ranges from $8.41 to $8.43

Suppose we put a trailing stop buy for HNU at $7.58
and a trailing stop buy for HND at $8.51

At 10:30 am EIA release the following:
The storage of Natural Gas increase by 114 billion cubic feat. This increase is a larger increase than the previous week. Supply is UP! Price of NG will go down. Therefore good day for bear HND.



At 10:30 am prices of both HNU and HND swing like a mtf as expected with this information.

The trailing stop buy of HND gets executed at $8.51.

HND ended up closing on June 18 at $9.05 and high of $9.07. That's a profit of $0.54 (6.3%)! Not bad for a day of work.



Of course, this is just my theory and it will only work if the trailing stop order gets executed at our price.

I went back to see whether this theory hold and it held 7 out of 8 Thursdays.

I'm interested to see anyone willing to try this strategy next Thursday.

Long term I'm bullish on Natural Gas.

Here some more charts of HNU and HND on Thursdays.

PAY Attention to the price at 10:30 AM
Left prices are HNU and right prices are HND.

Thursday May 28, 2009
Strategy worked



Thursday June 4, 2009

This is a whipsaw day. Strategy failed, but would negate loss/gain if both orders got executed.


Thursday June 11, 2009
Strategy worked

Just a reminder at 10:30AM every Thursday the storage information of Natural gets release.

http://www.eia.doe.gov/oil_gas/natural_gas/ngs/ngs.html

I 'speculate' that supply will decrease this week so price will increase. Hot temperature lately. Natural Gas Air Conditioners are getting used. Natural Gas is a cleaner energy than coal which may be what Obama administration wants.

Clearly beaten down by contango - these gas etf's can be brutal as most don't understand the dynamics of how they trade . UNG is tracking exactly the same way . I took a quick exit from this one after the last runup and will likely stay away until nat gas is clearly trending up which based on current inventories , won't be for some time . It looks like a technical bounce may be immenent but it can't be sustained IMO until the fundamentals are in line .

I find these ETF's interesting but I admit I don't have the balls to play with them much. I played with the oil ETF a while back but I keep an eye on this one. I have a friend I went camping with the other day that dropped a bunch into HNU recently. He is thinking it will come back at some time and I agree but to what exstent I do not know.
It's down in the $4 range and it used to be up to the $150+ i believe.

I have a few questions.
What will it take to get this up over $50 or even $100 again?
Is it even possible?
I imagine in the fall we will start to see a rise in Gas stocks due to the demand of gas. From what I hear it is not good to hold ETF's but with this one it seems like if held for a year or 2 it could really pay off. Any Ideas out there on my thinking would be great.

sub $3

got to be a bottom. The upside potential is pretty good

this thing is killing me!!!

IMHO We have reached the absolute bottom at $2.52 and should start the recovery now. I intend to have fun swing trading it through Christmas.