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Natural Gas ETF Pulls Back from Best Day in 4 Years

Yesterday's spike in natural gas prices sent UNG surging

Deputy Editor
Dec 31, 2024 at 10:39 AM
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Natural gas exchange-traded fund (ETF) United States Natural Gas Fund LP (NYSE:UNG) is pulling back from yesterday's surge, down 4.6% at $17.22 at last glance. UNG jumped 14.5% last session, its largest single-day percentage gain since August 2020, as natural gas prices saw their biggest jump since January 2022.

Expectations of a colder-than-usual January on the East Coast had traders murmuring of volatile storms and a potential "polar vortex," sending February-dated natural gas up 16.4% to $3.9360 per million British thermal units yesterday. Today, the contract is down 5.3%. 

UNG hit a November 1 record low of $12.37. And despite yesterday trading at seven-month highs, the ETF is still down 14.8% since the start of the year. Plus, the fund could be due for a short-term drop on the charts, per its relative strength index (RSI) of 80.7, which sits in "overbought" territory. 

Options trader have been betting bullishly. UNG's 10-day put/call volume ratio of 0.76 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits higher than 85% of readings from the last year. So while calls are still winning out on an absolute basis, the options pits have been much more bearish than usual. 

 

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