Commodity Chart Of The Day
Daily Natural Gas
Crude oil and the distillates have already started to trade lower, as one can see by examining the charts on those three products. The lone holdout in the energy complex has been natural gas, but based on the near 5% correction today and the failure to hold onto early gains, this could be the beginning of the correction forecast in recent weeks.
In the chart above, the 18 day MA (identified by the blue line) was challenged on its lows today. I have advised traders to scale into bearish plays using the Fibonacci levels as their targets on the way down. My favored play currently is shorting NGZ12 futures while simultaneously selling just of the money puts 1:1. I think an additional 25-40 cent break could happen in the coming weeks. On that, look to capitalize on shorts, and then reverse in an attempt to gain on bullish exposure into the winter months.
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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. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.