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UNG

$ung $ugaz $boil - Nat gas setting up for yet another rallyRecently, we warned that Natural Gas may set up another opportunity for traders to buy into a support zone below $2.70 with a selling range near or above $3.00. Our upside target zone is between $3.25 and $3.45. The price of Natural Gas has recently fallen below $2.69 and we believe this could be the start of a setup for skilled traders to identify key buying opportunity in preparation for a quick +8% to +15% upside swing. Historically, March and April have been pretty solid months for Natural Gas. Let’s go over the historical data using three different seasonality charts which all point to higher prices. Taking a look at the data, above for both March and April it appears we should have a positive price outcome over the next 20+ trading sessions. Thus, we can determine that the likelihood of a positive price swing between now and the end of April is highly likely. When we take a look at the chart data to see how our BUY and SELL zones are setting up, it becomes clear that any opportunity to BUY into the lower support channel, with a moderate degree of risk, could result in a very nice profit potential of between $0.35 to $0.70 on data that supports the Bullish potential as a 200%~220% advantage over downside potential. Take a look at the data that we are presenting and try to understand that these types of historical price triggers are not foolproof, yet they do provide a clear advantage. They allow us to see if and when there is any type of advantage to our decision making and if we can identify any real opportunity for future success. We believe any further downside price activity in Natural Gas will result in additional opportunities for Long trades with $2.45 being our absolute low entry target. Our upside exit target would be any level above $2.95, or higher, and our ultimate target objective would be $3.15 or higher. Our last trade in natural gas (UGAZ) gave us 30% return in just two weeks in February! This could be another opportunity for a trader to target a quick 8% to 15% swing trade in Natural Gas over the next 20+ days. Time to put Natural Gas on your radar again! Are you ready for this next move? Want to know how we can help you find and execute better trades? Visit www.TheTechnicalTraders.com to get our, technical indicators, market analysis, daily videos and trade alerts. Chris Vermeulen Technical Traders Ltd.
AMEX:UNGLong
by TheTechnicalTraders
Falling Price Into Critical Support = Opportunity/BounceThese plays happen all the time if you are looking for them. The weekly charts provide amazing opportunities, the key is to find these standout support or resistance areas and wait for the price to fall fast and hard to them, or spike in price into resistance. The FIRST time price tags the level you should be entering a trade for at MINIMUM an intraday reversal, but with the weekly chart, setup expects a couple of weeks for the swing trade to play out.
NYMEX:NG1!
by TheTechnicalTraders
Natural GasNatural Gas Daily I am watching for two potential patterns. The first (and the one I am not leaning in favor of) is a triangle pattern. If that is the case then we should break out next week. However, I am more inclined to believe that we are starting a drop into a minor C wave down to complete the flag pattern by mid December. Then one last strong push up to complete the larger B wave that Ill show below on the weekly chart. Not to mention that we are very over bought and I believe that the indicators need to settle down a bit before such a strong push higher. GL on your trading decisions. I hope this helps.
NYMEX:NG1!Short
by SalN
12
THE WEEK AHEAD: ADBE, COST EARNINGS; OIH, XOP, UNG DIRECTIONALSPersonally, I'm not doing a ton here beyond looking at cleaning up remaining December cycle setups and evaluating whether there are poo piles that should be looked at for the taking of tax loss in the margin account before year's end. Nevertheless, here's an outline of what's potentially playable in the coming week ... . ADBE (81/49) announces earnings on Thursday the 13th after market close. The 20-delta, January 18th 210/270 short strangle is paying a whopping 8.05/contract at the mid price, with the 25-delta January 18th 215/220/265/270 paying greater than one-third the width of the wings at a mid price of 2.13. Markets are showing quite wide at the moment, particularly in the defined risk setup, however, so it may prove unattractive at New York open from a liquidity standpoint. COST (76/31) also announces on Thursday after market close, but the background implied isn't generally what I'm looking for in an earnings-related volatility contraction play (generally, >50% is where I draw my "picky line"). On the exchange-traded fund front, petro leads the pack, with OIH rank/implied metrics coming in at 95/47, XOP at 79/44, and UNG at 72/86. With OPEC reaching an agreement late last week as to production cuts, I lean toward bullish assumption setups with time to work out/reduce cost basis, since it will take awhile for any cuts to appear in the pipeline. For example: an XOP June/Feb 25/34 upward call diagonal,* 6.55 debit/contract, break even at 31.55 versus 31.54 spot, max profit on setup of 2.45, 72.8% debit paid/spread width ratio. I'm already in a similar OIH bullish assumption setup, which is proving to be a "pulled the trigger" too soon type of thing. The back month in the OIH setup is in April, so I've still got time to reduce cost basis and for the trade to work out in some fashion, even though it's a bit of a rough sled here. With UNG in particular, I continue to look at a bearish assumption seasonality play, but markets on any given setup have been ugly wide, no matter what type of setup I seem to look at, and lack of liquidity is not your friend when doing an options setup. For broad market premium sellers: SPY (47/30), IWM (78/25), QQQ (69/27). * -- Buy the June 25, sell the February 34.
AMEX:SPY
by NaughtyPines
THE WEEK AHEAD: XOP, OIH, USO, XLE, UNG, EEMEarnings With >70 Rank/>50 Implied: No underlyings with highly liquid options with earnings announcements in the next week. With single names with earnings announcements in the rear view mirror, we're looking at earnings starting up again in the January cycle; I'd rather just play those closer to the announcement, rather than get caught up in a volatility expansion (e.g., CAT (84/40) with earnings in 53 vs. January opex 47 days until expiration). Exchange-Traded Funds With >50 Rank/>35 Implied XOP (81/44) OIH (81/43) USO (81/57) XLE (75/27) UNG (75/88) Notes: As you can see by the pictured setup, XOP is at the bottom of its 52-week range. With OPEC talks right around the corner (and likely jawboning to ensue), I'm slightly enamored with a bullish assumption setup here as compared to a nondirectional premium selling play, even though there's premium to be had (the Jan 18th 29/37 short strangle's paying 1.09 with a 70% probability of profit). Last week, I entered into a similar setup in OIH, (See Post Below), since it's gotten the sledge hammer to a greater degree than the rest of the petro-sensitive exchange traded funds. In any event, here are the metrics for the pictured play: Max Loss on Setup/Buying Power Effect: 4.02 debit/contract; Max Profit on Setup: 1.98/contract; Break Even on Setup: 33.02 vs. for a 6-wide, BE at 33.02 vs. 32.81 spot; Debit Paid/Spread Width Ratio: 67%. Look to roll the short call aspect out on significant loss of value (usually 50% max) and to take profit at 50% max (.99/$99 per contract). UNG has been pesky. I've looked at getting into a bearish assumption, seasonality-related short setup, but every time I look, the markets are stupid-wide, making it unattractive from an entry/exit perspective. Given its high rank/implied, however, it might be amenable to a bearishly skewed oppositional setup if you're willing to do a bit of price discovery and not settle for sub-mid price nonsense: the Jan 18th 27/46 short strangle is paying 2.92 at the mid with a net delta metric of =25.44 and break evens at 24.08 and 48.92, which covers a fairly huge swath of the 52-week range. If you're willing to spend a little more time in the trade, the April 18th 26/46 pays 4.91 at the mid, is =29.44 delta, and has break evens of 21.09 and 50.91, although I could see the reluctance to hang yourself out there undefined given the movement it's experienced over the last several weeks. Broad Market Exchange-Traded Funds Ranked By 30-Day Implied EEM 26 QQQ 24 IWM 20 SPY 18 EFA 18 Notes: The EEM Jan 18th 41 short straddle is paying 2.69; the ~30 delta, 39/43 short strangle pays 1.15. I've been working it via double diagonal with a short straddle body, just so I don't have to leg into and out of the long strangle aspect and to budget buying power devoted to the trade. (See Post Below).
AMEX:XOP
by NaughtyPines
2