Commodity King Dennis Gartman's Natural Gas Call Raises Eyebrows (UNG) (LNG) (CHK)

July 10, 2012 11:44 AM EDT
With gains of 25 percent in the past 30 days, United States Natural Gas Fund, LP (NYSE: UNG) is turning heads. The ETF owns various natural gas futures contracts, and is a favorite way to trade the commodity. But UNG isn't the only investment turning heads.

According to 'Commodity King' Dennis Gartman, Cheniere (NYSE: LNG) and Chesapeake (NYSE: CHK) are two perfect equities for playing the natural gas rally. Gartman revealed his picks during an interview on CNBC's Fast Money yesterday.

"If you're going to play nat gas equities, this is the place to play," said Gartman.

Cheniere is the first company to win approval to export natural gas from the continental U.S. "And although nat gas prices are two dollars and change here, they're well over $16 in parts of Asia. They have the permits to move it - and they have the plants to do it," he said.

Gartman's second call, Chesapeake, is a stock that was beaten up in May because of dubious investments made by its CEO, Aubrey McClendon. But "don't discount how smart Aubrey (McClendon) is," said Gartman. "He made some mistakes but his company remains dominant in the game."

United States Natural Gas Fund, LP (NYSE: UNG) is trading lower by 2.90 percent in early trading on Tuesday as the price of natural gas futures pull back from highs near $3.00, currently $2.81. Natural gas equities are also trading lower, inline with today's decline in futures prices.

Gartman thinks the price of natural futures has the potential to go as high as $4.50.


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