Don’t Ignore Fundamental Analysis
Day Trading Gas related stocks will be much more profitable when you pay attention to fundemental analysis. Fundamental analysis is often left out of day trading, but this not always a good thing. Fundamental analysis is helpful in industries that affected by macro-level events.
Gas stocks is the perfect example of this. Because gas prices are a commodity, they are easily affected by numerous factors. Current events in gas-extracting areas will affect gas stock. The demand of a commodity by such as gas will also determine the price and stock.
In 2017 the US produced 20% of the total worldwide. The US is pretty stable and doesn’t cause much volatility in the market. Other big names in gas production, such as Iran and Russia.
Iran, for example, is under restraints of the newly re-instated US government sanctions. This will make it tough for Iran to take full advantage of its ability to produce.
Keep Up With Current Events
The rapid rate of events surrounding gas allows day traders to jump in and make money from the consistent changes in gas-extracting countries.
On April 22, Natural Gas Futures increased from $2.490 to $2.526. It was around this time that reports of US sections on Iran began. As evidence became more solid that sanctions would indeed be placed, the price of Gas Futures continued to increase. This price increase is created due to the lack of supply expected from Iran and an overall high demand.
The price of gas affects a variety of industries and companies. Revenue declines when companies have pay higher prices. So, gas futures will fluctuate in price as well as the price of certain company stock.
Value the Big Picture
It is so important to be aware of what is happening when day trading gas related stock. You should study the history at large and pay close attention to current events. It will be vey helpful to study and be familiar with the regions that export/import the highest amounts of gas. If you understand the background, it will be so much easier to read the market and know what developments are important.
Understanding the big picture will allow you to see trends to help you day trade gas related stock. Look at developments in importing/exporting countries the same way you would look at stock indexes and ETFs. This will help you understand how to get the most success from Gas-related Stocks.