Energy ETF: Oil (USO) and UNG (Natural Gas)

If you are looking for no brainer stocks investment opportunity, you can look at these two energy ETF, USO (United States Oil Fund) and UNG (United States Natural Gas Fund). Energy is a necessity is any economy and we need it every day. Imagine how we are going to live in the modern day without energy.

 

Energy related stock or ETF have direct correlation with the economy activities. When economy recovery gathers pace, the energy demand and consumption increase and thus drive the energy price up.

 

Looking at both USO and UNG charts, these two ETF are super under value and post the greatest upside potential. Downside is limited because now we are in slow recovery mode unless the whole world enters into double recession.

 

USO

•  Background: The United States Oil Fund, LP ("USO") is a domestic exchange traded security designed to track the movements of light, sweet crude oil ("West Texas Intermediate"). USO issues units that may be purchased and sold on the NYSE Arca.
• Historical High: US$118
• Current Price: about US$36 

 

 

 UNG  

• Background: The United States Natural Gas Fund LP (UNG) is an exchange traded security that is designed to track in percentage terms the movements of natural gas prices. UNG issues units that may be purchased and sold on the NYSE Arca. 
• Historical High: US$64 
• Current Price: about US$6 

 

Assuming both ETF shoot up to HALF of the historical high when the economy is fully recover, you can do your math how much upside potential the ETF have…. If you look back the chart in Jan – June 2008, you can see how the bull pushed the price up close to 100% within 6 months. If you time it right, you will be able to achieve your handsome retirement plan. If you are not good at how to time the entry, you can just start to accumulate these ETF and hold for a few years. I am sure you will be rewarded pretty handsomely because you are buying low now and selling high later. 

 

Additional Useful Information for your reference:

• If you want to learn how to trade ETF safely, click here.
• If you want to find out more on the energy related information for your long term investment, check it out the report here. Hottest Investment Plays In North America: Oil And Gas Bulletin. – by Keith Schaefer 

Disclaimer: This is my own analysis and it is not a recommendation to buy or sell the ETF. Use the information at your own risk.

 

The Start of Bear Market?

DOW Jones Industrial, S&P500 and NASDAQ Composite have all broken the 200D MA support. All three indices show similar chart pattern and currently traded at about 23.6% Fibonacci Retracement Level. There will be probably a short term bullish rebound from this support level before continuing the bearish down trend. Also take note that all three indices were unable to break the 50D MA resistance and turned down.

DOW JONES INDUSTRIAL

• Resistance: 20D MA and 200D MA
• Support: 10,109 (23.6% Fibonacci Retracement Level) and 10,000 (psychological support)
• Target Correction Level: 9,428 (38.2% Fibonacci Retracement Level)

SNP 500

• Resistance: 20D MA and 200D MA
• Support: 1,094 (23.6% Fibonacci Retracement Level)
• Target Correction Level: 1,014 (38.2% Fibonacci Retracement Level)

NASDAQ COMPOSITE

• Resistance: 2,322 (previous resistance in Dec 2009) and 20D MA
• Support: 2,230 (23.6% Fibonacci Retracement Level) and 200D MA
• Target Correction Level: 2,046 (38.2% Fibonacci Retracement Level)

 

STI - 200D MA Support Broken!

STI has broken the 200D MA support and is heading to test 2660 (23.6% Fibonacci Retracement Level). If this support fails to hold, a bigger correction will happen and STI may go all the way to 2430. The current chart looks bearish but STI may rebound from 2660 support in near term but will face the resistance (200D MA) at about 2770.

IndoAgri - Forming a Double Tops

IndoAgri is forming a double tops since breaking down from the up trend support. Neckline is at about $1.95. Breaking down the neckline with heavy selling volume will confirm the double tops formation with price target of $1.35.

Golden Agri - Starting a Deeper Correction

Follow up from previous post.
http://mystocksinvesting.blogspot.com/2010/05/golden-agri-breaks-up-trend-support.html

Golden Agri is unable to move back and went above the up trend support. It is also confirmed that the previous support has turned into resistance. In addition, 200D MA support is also broken. The chart looks bearish and probably starts a deeper correction if there is no rebound from this 200D MA support.

Yangzijiang - Critical Support Broken!

Yanzijiang has broken a key support level at $1.26 to $1.28. This support is a combination of the up trend support, previous double tops resistance and 50D MA. If Yangzijiang cannot get back and moves above the uptrend support level in the next few days, that indicates the end of the up trend. Next strong support is at $1.14 which is the previous neckline of the double tops and 200D MA. Short term down side risk is about 10% base on the current market sentiment.

Noble Group - Double Tops!

Noble Group has formed a Double Tops and the neckline has broken. The price target of this double top formation is $1.27 which is also a 50% Fibonacci Retracement Level. The breakdown of the neckline is also confirmed by increase in the selling trading volume.

Pacific Andes - Testing Up Trend Channel's Support

Pacific Andes is currently testing the uptrend channel support at about $0.314. This channel support coincides with a significant 61.8% Fibonacci Retracement Level.

Things to watch out for:

• Whether there is any trend reversal candlestick pattern to confirm Pacific Andes bounces off this support level. If yes, the uptrend channel is probably still in tact and the next resistance is $0.358.
• If this $0.314 support level is broken, the next immediate support is $0.282 (50% FR Level). This level has been proven as a very tough resistance to break for past 4 occasions. This resistance turned support is a significant support level.

Technics Oil & Gas - A Good Entry Level

Current Technic Gas & Oil stock price looks like a good entry level both technically and fundamentally.

Technical Analysis 

• The stock price broke out from a Falling Wedge with a price target of $0.63.
• The stock price came back to test the Falling Wedge previous resistance and rebounded from this resistance turned support level.
• Since then, the stock moves above 20D, 50D and 200D MA and stay above 78.6% FR support.
• A "higher high, higher low" up trend chart pattern is observed. 

Fundamental Analysis (Base on latest quarter financial performance) 

• Increasing Net Operating Cash Flow
• Dividend about 4.8% (base on $0.57 stock price)
• ROA = 14.9 (Annualised)
• ROE = 32.1 (Annualised)
• Order Book stands at $82 million.
• Management expect better FY2010 than FY2009 base on current order book and project schedule.
• Company shares buy back recently between $0.565 and $0.57 these few days.
• PE = 12.89 (base on $0.57 stock price) versue 2008 PE of 20.6 and 2007 PE of 26.4

Capitaland - Testing an Important Support

Capitaland is current testing an important support at about $3.63. This support is very significant because it holds very well for the past 5 times (shaded in blue). Currently Capitaland is going to test this support again for the 6th time after fails to break and bounces back from 20D MA resistance (shaded in red). On another hand, Capitaland has shown a "lower high, lower low" bearish chart pattern.

• The next immediate support after $3.63 will be $3.402 (61.8% Fibonacci Retracement Level).
• The next important resistance is $3.854 (78.6% Fibonacci Retracement Level) which has been proven to be a strong resistance to break from the previous 5 occassions. In addition, this 78.6% FR level will also be the 50D MA and 200D MA.

Sound Global - Start of Elliot Wave B Now?

Sound Global is previously Epure International. Sound Global is showing a nice Elliot Wave and looks like starting a Wave B. If the wave count is correct, this level looks like a good entry level to trade the upside of Elliot Wave B.

Ezra - On Elliot Wave C now

Ezra is currently on Elliot Wave C and is probably heading towards the correction target of $1.805 (61.8% Fibonacci Retracement Level) or even lower at $1.55 (50% Fibonacci Retracement Level). Current Ezra chart looks bearish as the stock price has broken the 200D MA support and $2.00 psychological support. 20D MA is falling drastically and is going to cross down the 200D MA.

SATS - Forming a Rising Wedge

SATS is forming a Rising Wedge pattern. This Rising Wedge pattern in an up trend is a trend reversal pattern.

Technically base on the chart pattern, the upside potential is about 5.4% (from current price of $2.76 to resistance of $2.91). Downside risk is 24% (from current price of $2.76 to $2.10 price target after breaking down from Rising Wedge).

Fundamentally SATS current PE does not show much upside potential. SATS current PE is 16.65 compared to past three years average PE of 17.66.

SATS does not look attractive to me both technically and fundamentally except giving a dividend yield of 4.7%.

Golden Agri - Breaks Up Trend Support

Golden Agri has broken the up trend support level recently. The key question now is whether Golden Agri can move back up and stay above the up trend support line like what the stock did back in July 2009. If GoldenAgri cannot break this uptrend support turned resistance line, the stock will probably start a deeper correction.  The next two immediate supports are $0.50 (200D MA support) and $0.456 (61.8% Fibonacci Retracement Level).

Genting Singapore - Trading Within a Range

Genting Singapore looks like trading within a range from $0.86 (50% Fibonacci Retracement Level)to $0.969 (61.8% Fibonacci Retracement Level). It looks like a good pattern to trade if Genting continues to move within this range until the breakout.

From the chart, a mini double bottoms has been formed and Genting may be forming a mini double tops too. The chart looks interesting for me to keep in the short term trade watch list. Feel free to comment if you see other patterns.

Keppel Corp - Morning Star!

A trend reversal candlestick pattern Morning Star is seen in KepCorp after closing today trading session. KepCorp may move above the 20D MA at about $9.50 in the next few trading days. Immediate resistance is at 10.21 after breaking the 20D MA resistance.

OCBC Bank - Upside Potential Limited?

OCBC Bank is currently trading just above the up trend line and is very near to the resistance level of $9.04. Unless the current sentiment in financial sectors change to a more bullish note, otherwise the downside risk is much higher than upside potential. 20D MA, 50D MA and uptrend support line are also very close to each other. If OCBC breaks below these 3 support levels, the 200D MA will be the level to watch.

StarHub - Hammer!

Starhub showed a Hammer in the last trading day after the recent sell down. This Hammer is also near the 61.8% Fibonacci Retracement Level which is a significant support indicates a high possibility of trend reversal. Next immediate resistance is at about $2.279 (78.6% FR level and 50D MA).

Although there is a potential trend reversal and the price will go up, but the upside potential of about 3.6% (from $2.20 to $2.28) does not look attractive to me unless I want to acquire Starhub for the quarterly dividend. Anyway, May usually is a bearish month and I will take a wait and see approach to see whether Starhub can drop below $2.00.

SGX - On Down Trend

SGX has broken 4 supports (20D MA, 50D MA, 200D MA and 78.6% Fibonacci Retracement Level) in one week. Base on the chart pattern, SGX seems to trading in a slow down trend as the new low is always trading lower than previous low.

Key levels to watch:

• SGX may rebound from $7.701 (78.6% FR level) but it is important to see whether SGX can break the 50D MA resistance (at about $7.90). Base on the current sentiment in financial sectors and Eurean PIGS debt crisis, it is unlikely to happen base on my opinion. However, I can only trust the chart more than my opinion base on my last lesson learnt.
• If $7.701 support is broken, the near term support is the down trend support at about $7.30. This support may not be strong because it is not very obvious. SGX may go down to $6.878 (61.8% Fibobacci Retracement Level) if this weak down trend support is broken.

In summary, SGX chart is bearish and I am waiting for a clear reversal pattern to pick up this blue chip.

Singapore Press Holding (SPH) - Breaks the Trend Support

SPH broke all 3 key supports (20D MA, 50D MA and up trend support) in last trading week. The stock price is approacing $3.736 which is 78.6% Fibonacci Retracement Support Level. There may be a small rebound in the coming week from this support level.  However, if SPH cannot go above $3.90 (the uptrend support and 50D MA), the next important support to watch is 200D MA at about $3.70. SPH may go as low as $3.395 if this 200D MA support is broken.

China Animal Health - Nice Waves on an Up Trend

China Animal Health seems like trading in Nice Waves on an Up Trend.  The wave pattern and support / resistance fit nicely on Fibonacci Fan and Fibonacci Retracement Levels. The Uptrend support (green line) fits exactly to Fibonacci Fan (purple lines) at 38.2% line. Whenever the waves hit this 38.2% lines of Fibonacci Fan (green shaded areas), the stock bounces off and form a new high.

Base on the pattern, it is predicted that China Animal Health may test the 38.2% lines at about $0.27. If the stock price bounces of this $0.27 support level, it will test the previous high of $0.36 and may possibly continues the "Waves Pattern in the Fibonacci Fans" if this $0.36 resistance is broken.

It looks attractive to me to enter at $0.27 with a potential upside 33% to reach $0.36 or even higher. However, it is important to wait for the candlestick pattern to reverse before entering the trade.

Rotary Engineering - Bullish Engulfing Pattern!

Rotary Engineering is showing a Bullish Engulfing candlestick pattern today. This is a trend reversal pattern after a down trend.

• Next Immediate Support is at about $1.00.
• Next Immediate Resistance is at $1.06 which is 50D MA, 200D MA and 78.6% Fibonacci Retracement Level.
• In order for Rotary to start an uptrend, the stock price need to stay above $1.10 which is above all three MA first, and subsequently clear $1.18. Otherwise Rotary may be moving sideway between $1.00 and $1.18.

CSE Global - Break the Up Trend Support

CSE Global has broken an up trend support and currently trading below 20D and 50D MA. The candlestick shows a potential formation of a Morning Star but need to wait for the confirmation of next trading day. Next immediate support is at $0.86 which is a 200D MA support and also 61.8% Fibonacci Retracement Level. The stock has to go above $1.00 to keep the up trend in tact.

IndoAgri - Break Critical Support

IndoAgri seems to have broken the uptrend support which is also the support for a Double Tops chart pattern, with a spike in trading volume. If IndoAgri cannot move back above the support level (about $2.25), the stock may go down to $1.713 which is a Double Tops breakout price target and also 61.8% Fibonacci Retracement Level.

Financial ETF (XLF) - Good time to short!

The European debt crisis has triggered panic selling in the banks and financial stocks worldwide. I am entering a XLF SEP 15 PUT option to ride on the slide of the current financial sectors sell down.
XLF (Financial ETF) has broken the 50D MA support and heading towards the next immediate support of $14.723 (78.6% Fibonacci Retracement Level and also 200D MA support). If this support level is broken, a deeper correction will probably start in the financial sector.

Europe PIGS Debt - I owe you, you owe me! Who is going to pay?

Banks and governments in these five shaky economies owe each other many billions of euros — converted here to dollars — and have even larger debts to Britain, France and Germany. Arrow widths are proportional to debt amounts.

JP Morgan Chase (JPM) - A Good Candidate to Short?

JPM has just broken 200D MA support and looks like a good short candidate in May. In addition, the cloud is still very dark in the financial sectors on top of the "Sell in May & Go Away" sentiment.

Things to watch:

• Whether JPM can stay above 200D MA. If not, the next immediate support will be $40.923. If this 61.8% FR level support is broken too, JPM will be very bearish and starts the down trend.
• If JPM bounces back from 200D and breaks the 50D MA resistance at about $44.00, the bull will be coming back.

I have entered my JPM SEP 43 PUT position and will be watching very closely these two levels.

Citigroup (C) - Testing 50D MA

US Financial stocks have been very bearish recently due to the debt concerns over PIGS (Portugal, Italy, Greece and Spain). This may present a good opportunity to buy some good financial stocks during this correction in May. Citigroup is one of the financial stocks for long term investing and I am waiting for the right entry point. Base on the chart, C is currently testing 50D MA. I am waiting to see whether C can stay above 200D MA support at $4.00 before deciding my entry point. If this 200D MA support is broken, $3.655 (61.8% Fibonacci Retracement Level) looks like a good entry point to start stock accumulation.

Sinotel - Testing Support of a Falling Wedge

Sinotel has been on down trend recently after breaking 20D, 50D and 200D MA support. The stock appears to be forming a Falling Wedge and Sinotel is currently testing the support at about $0.395 (Falling wedge support at 50% Fibonacci Retracement Level). If this support is broken, Sinotel may go down to $0.317.

Yangzijiang - Bounces off from the support and reverse the trend

Yangzijiang has bounces back from the support of $1.26 and looks like reverse the trend to up trend.

$1.26 is the combination of three suppports (Double Top Resistance turned Support, Up Trend Support and 50D MA support). Next immediate resistance is $1.472.