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Natty Trading Update 1/14/19

|Includes: BOIL, DGAZ, KOLD, UGAZ, The United States Natural Gas ETF, LP (UNG), UNL
Summary

Mother Nature finally switches direction.

Price targets and what happens next.

Forecasts look cold enough to get March (H) to ~$3.25-$3.35. Anything more requires a continuation of cold weather into Feb lining up nicely with the weaker comps from 2018. Don't be greedy! The volatility this winter is a great reminder of how quickly sentiment can change with the latest forecast. Don't be afraid to lock in profits for 25-50% of a winning trade when weather goes your way. Friday afternoon was a strong signal to add to long positions after ~9 days of stuck in the mud action. I've held 450 shares of UGAZ since Jan 5th and chose to keep the position small, but it's noteworthy how accurate the Friday signal has been since late Nov. Was hoping for high $40's so happy to book profits on 50% of the position into today's close and then let the rest ride.Would love to see May/June contracts bounce to ~$3.20 setting up the next short trade. Expecting big injections in mid/late April through May if we get average temps.Gas rigs went over 200 for the first time in a while. WTI is hitting resistance in the low $50's, but L48 output hasn't slowed yet. Not expecting much help with associated gas unless WTI can stay sub ~$50 for 3-6 months.The E&Ps are bouncing nicely with WTI coming off the lows and gas getting weather support. Cabot (COG) held up the best during the beat down and is heading for $25. Still think the gas E&Ps have to be treated as trades given the weak long term charts. 

Don't over think it, the price action is purely a function of weather expectations. Good luck with your trades!

Disclosure: I am/we are long UGAZ.