An exchange traded fund that holds natural gas futures slammed into resistance Wednesday on very heavy volume at its 200-day moving average.
U.S. Natural Gas Fund (UNG) paused at the key technical indicator following a rally of more than 50% from the April low.
The commodity fund holds more than $1 billion in assets. UNG won’t exactly follow the spot price for natural gas because it invests in futures contracts.
Prices this week rose to their highest levels in over seven months as warm weather in the U.S. drives energy demand. [Natural Gas ETF Jumps 54%]
Natural gas futures were down for the second day, however, on profit taking and moderating temperature forecasts, Reuters reported.
“The only demand is coming from seasonal weather factors. The fundamentals continue to be bearish,” said Addison Armstrong, senior director of market research at Tradition Energy, in a MarketWatch report.
U.S. Natural Gas Fund