Tuesday, June 18, 2013

Natural Gas

Natural Gas

I've been keeping an eye on some NG spreads for a while now and waiting for the right time to enter.

Some of the current ones have seasonal windows ending around July 10.

That gives us a few weeks.

I tend to like the longer seasonal windows and this one looks reasonable.

We are seeing a nice level of support here and there are two seasonal windows. One in a weeks time and another longer one. It might be an opportunity for a nice longer term trade.

NG spreads saw a sharp reversal on Monday and this might be a good opportunity to enter.

On this particular spread we are seeing a decent divergence from seasonality which I often like to trade.

The first window is June 23-July 10. It's been right 100% of the time over the last 15 years with an average profit of $1000.

I think you could risk $1000 on the trade and potentially trail the stop all the way into the second seasonal window which runs July 29-Sep 2. Something to consider.

28 looks a good price.

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