Commodity Chart Of The Day
Daily Natural Gas
Natural gas failed to hold onto gains today reversing to close back under its 8 day MA as seen above. I had been calling for a trade lower and with the rejection of a $3 trade should be a preliminary sign that prices are headed south.
Stochastics on the daily are also indicating natural gas is overbought and as seen with the orange line; the 8 day MA prices have remained above that pivot point since prices penetrated that level nearly three weeks ago. I suggest using the Fibonacci levels as your targets on downside movement. I like the idea of bear put spreads and also a short futures trade while simultaneously selling out of the money calls 1:1.
What also makes this attractive is the risk/reward dynamic; risking 20-25 cents looking to make 40-50 cents.
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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.