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).
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.
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