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Natural Gas Continues To Offer Opportunities For Longs

By Chris VermeulenCommoditiesApr 11, 2019 02:23PM ET
www.investing.com/analysis/natural-gas-continues-to-offer-opportunities-for-longs-200406073
Natural Gas Continues To Offer Opportunities For Longs
By Chris Vermeulen   |  Apr 11, 2019 02:23PM ET
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Historically, April has been a pretty consistent upside opportunity in Natural Gas. Over the past 24+ years, NG's upside opportunity has been accurate over 68% of the time with the average upside ranging from $0.60 to $0.85. With Natural Gas down near recent lows and because we are still fairly early in the month, our researchers believe the opportunity still exists for some quick profits in UNG with an upside move from below $23.95 to a target level of $26 to $28 (roughly +9% to +18%).

The downside risk is rather limited with clear support visible below the recent lows (near $22.75) and a historical likelihood of any further downside price swing being below 33%. Our team sees an opportunity to establish new longs in UNG below the current daily price gap (below $23.50).

United States Natural Gas ETF
United States Natural Gas ETF

Historical data mining shows that average upside rallies at this time of the year are typically ranging just below $1. Thus, the upside potential for this move at about +9% to +12% should be sufficient for quick profits. Skilled traders can hold a small portion of the trade for any potential run beyond these initial target levels, but we caution traders that $28.50 to $29 is an area of strong resistance. Our last trade in Natural Gas with subscribers netted us a 30% profit in UGAZ within 10 days back in February.

Our researchers are still waiting for the daily upside gap to fill with prices below $23.50 before we look to enter any new trades. We have been patiently waiting for a bottom to form, knowing that we have this trade setup with a relatively high success rate. Keep an eye on Natural Gas and look for any good entries below $23.50 in UNG – the deeper the better. Our Fibonacci modeling systems are already suggesting a bottom has set up and any upside price move above $24.30 will likely prompt a bigger rally toward $26 to $28.

Chris Vermeulen

Natural Gas Continues To Offer Opportunities For Longs
 
Natural Gas Continues To Offer Opportunities For Longs

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Tom Sam
Tom Sam Jun 05, 2019 5:56PM ET
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Am an avid follower of Chris. April down, May is down and we are in June and is still heading down. This time the NG analysis missed it BIG time. Fortunately I follow Chris, unfortunately I am deeply in the red.
Jiří Bareš
Jiří Bareš Apr 13, 2019 1:57AM ET
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inventories geting up much more then demand is rising..... steel bearish
Grant Oakes
Grant Oakes Apr 11, 2019 11:36PM ET
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Your own analysis states there is a 32% chance that April will be bullish. This is the April that will happen with injections nearly double the 5 year average. Send your analysts back to school, they missed this one big time!
Steve Chu
Steve Chu Apr 11, 2019 9:20PM ET
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I agree. NG will go up some time in April to July. History will repeat itself.
 
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