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