Investment thesis
Since our last release on the VelocityShares 3x Long Natural Gas ETN (UGAZ), our bearish view on the underlying has not materialized, amid colder-than-expected temperatures which contributed to sustained demand for the flammable complex.
Going forward, we are reverting our view, initiating a bullish positioning on the complex and its proxy UGAZ. In spite of speculators decreasing significantly their bets on natural gas futures and although injections into storage continue to be strong, we believe that the flammable commodity is set for a bounce, as weather data become considerably more supportive.