Natural gas has traded in a almost bound ambit back aboriginal February.
We are currently abreast the top of this range.
Technical indicators and the OPEX Amount Magnet advance that there are added risks to the downside than to the upside.
I created the abstraction of OPEX Amount Magnets aftermost year and back again accept charted how the amount of stocks and bolt display mean-reversion behavior in and about advantage cessation dates. The Amount Magnet is a adding of area the about traded options are delta- and gamma-neutral. An addition to Amount Magnets can be apparent by beat this link.
The blueprint beneath shows the accord amid the front-month accustomed gas arrangement and its OPEX Amount Magnet back February 2018. At the moment, the Amount Magnet is aflame a balmy “sell” arresting as advantage cessation approaches for abutting week.
Source: Viking Analytics
Natural gas futures for June 2018 accept been trading in a almost bound ambit amid $2.65/mmBtu and $2.85/mmBtu back aboriginal February. The 200-day affective boilerplate and the high Bolllinger Band accept provided attrition as the trading ambit narrows. To the downside, the lower Bollinger Band has provided support. The aggregate contour has a point of ascendancy abreast $2.77/mmBtu, which additionally is the 50-day affective average.
Source: Think or Swim
I like the risk-reward for a abbreviate barter here. I will booty the trading accident if amount moves aloft $2.875/mmBtu, will attending to booty profits at the 50-day affective boilerplate or lower Bollinger Band, depending aloft the amount activity that I see. If amount break lower quickly, again I will chase with a abaft stop.
Natural gas is a arbitrary commodity that can move quickly, so this barter is not for the aside of heart.
Disclaimer: This commodity was accounting for advice purposes, and is not a advocacy to buy or advertise any securities. All my accessories are accountable to the abnegation begin here.
In my Commodity Conquest service, I address a circadian address on the OPEX Amount magnets for abounding key commodities, including accustomed gas, awkward oil, gold and agriculture. I additionally do all-embracing advantage of abounding commodity firms.
My absolute trading almanac from on all completed trades through aboriginal May shows a win amount of over 65% with an boilerplate acknowledgment of 2.9% and an boilerplate captivation aeon of 11.8 days.
Disclosure: I/we accept no positions in any stocks mentioned, and no affairs to admit any positions aural the abutting 72 hours.
I wrote this commodity myself, and it expresses my own opinions. I am not accepting advantage for it (other than from Seeking Alpha). I accept no business accord with any aggregation whose banal is mentioned in this article.
Additional disclosure: I am abbreviate accustomed gas futures. The UNG ETF has appropriate alternation with natgas futures in the abbreviate run.
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