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Play Natural Gas for Cheap

by Sam Collins 11/05/09

First Trust ISE-Revere Natural Gas Index Fund (FCG) -- This exchange-traded fund (ETF) seeks to replicate, net of expenses, the ISE-Revere Natural Gas Index, which consists of exchange-listed companies that derive a substantial portion of their revenue from the exploration and production of natural gas.

FCG Chart

Chart Legend

On Oct. 14, at $18.23, I said, "Since its low in March, this ETF has more than doubled despite a bear market in the price of natural gas.

"And, since August, high-volume accumulation has driven the fund higher, tracking its 50-day moving average.

"The Moving Average Convergence/Divergence (MACD) issued a recent buy signal, indicating that a breakout from the bull channel is possible with a trading target of $28 to $30. But long-term investors may want to buy and hold this ETF as an investment in the future of natural gas.

The recent pullback from just under $20 could offer a good opportunity to accumulate shares of FCG.

Our trading target of $28 to $30 is still in place.

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