Thursday, June 3, 2010

Keep an Eye Out on Natural Gas

Yesterday in the same speech Obama promised us a great jobs report he mentioned natural gas as an alternative akin to solar, wind farms and the like. This has certain market pundits foaming at the mouth, as if a magic wand will suddenly change the energy complex in America. It won't (certainly not anytime soon) but that doesn't matter - perception is all that matters in the stock market, at least in the near term. Since that speech both natural gas itself and the stocks have been flying as traders pile in.

While a very flawed instrument, here is the 'trader's choice' for tracking natural gas itself.

And if one is not interested in taking individual stock risk sorting through the 40,50 natural gas oriented stocks a nice ETF, First Trust ISE Revere Natural Gas Fund (FCG) is available and actually has good daily volume of just under a million shares a day with just under half a billion in assets - i.e. it is liquid unlike many ETFs (website here). Further unlike some top heavy ETFs its assets are spread nicely over many stocks in an even manner.

Top 10 Holdings (as of 6/2/2010) Holdings Percent (%)
Mariner Energy Inc. 4.98
Cimarex Energy Co. 4.63
Pioneer Natural Resources Company 4.58
EOG Resources, Inc. 4.05
Ultra Petroleum Corp. 3.78
Questar Corporation 3.77
EnCana Corp. 3.58
Forest Oil Corporation 3.50
Newfield Exploration Company 3.44
Range Resources Corporation 3.43

I am considering one or the other as we speak ...

No position

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