Is the U.S. Natural Gas ETF (Ticker: UNG) at last ready for a bounce?  “UNG” has unsuccessfully been fighting the gravity of over-supply and diminished demand since July 2008.  The value of this ETF is now DOWN over -90% since its peak at around $63/share over 2 years ago!  Today investors can purchase this ETF for approx. $6.00/share.

For more insights, check out our  Stock Market Companion Daily and Weekly “UNG” Chart here.

Natural gas supply has steadily increased with the introduction of new methods of reaching previously untapped natural gas reserves, while demand has steadily fallen throughout this recessionary/low growth period.  We saw yesterday in this report from the US EIA, that while natural gas spot prices have fallen a bit last week, demand increased some and total supply of gas fell a bit.  If this combination of modestly increasing demand with diminishing supply continues, there is a chance for a strong opportunity here.

A move above $6.10/share in the ETF price may be favorable for investors and may indicate a possible confirmation of “bottom” being put in place.  Keep in mind that many – including ourselves at the Stock Market Companion – have been expecting a bounce in “UNG” for some time, and that each time investors have moved in for a chance for real profits over the past year, they’ve been handed back their hat with losses.

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