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Natural Gas - A Special Type Of Trade. One Of The Best Set-Ups.

Friday  11 June 2010

[Why have an interest in Natural Gas, or futures?  Charts are charts,
and the principles behind them are equally true, regardless of the
underlying instrument, a stock, bond or futures.  They all beat to
the same force of supply and demand, reduced to price and volume.]

 When a market builds a sideways base, breaks out of it, then retests
the breakout, it is one of the "safest" kind of a position to take. 
Natural Gas has been in a sideways base from which a strong move
up should emerge.  Once price breaks out of the base, in this case to
the upside, it is a show of strength.  At some point, the breakout will be retested, and it is on the retest that a position can be taken with
relatively small risk.  No trade is ever a guarantee, but some do carry
a higher probability degree of a successful outcome.

 We recommended long positions this morning at 4.820.  The objective
is the 5.250 area, and that will be refined if/as price moves in that
direction.

 

NGQ D 11 Jun 10