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Daily Natural Gas Update - 04.01.2013

By
Posted on Fri, 04 January 2013 20:25 | 0

In the last 6 weeks natural gas prices are down nearly $1 in the futures which would not be a big deal if we were talking about Crude oil but this actually represents greater than a 20% reduction in prices. To me this is great news because I think the deprecation represents a grand buying opportunity feeling that prices will snap back in the coming weeks.

Natural Gas Update - 04.01.2013

I’ve started to scale into bullish option trades with some of my clients advising vertical call spreads in April. We are selling (1) closer to the money call and buying multiple out of the money calls. If we get a 25-40 cent pop in the coming weeks as I anticipate this trade should work out well. While it is never cold in Florida where I reside if we get a colder than anticipated weather in the Northeast or Midwest that should be enough to get short covering and a trade back to above the 38.2% Fibonacci level and potentially with buying interest lift prices back near the 50 and 100 day MAs just above $3.60 on the chart above.

By. Matthew Bradbard

To discuss in more detail this chart or any other you can reach me at:

mbradbard@rcmam.com or 954-929-9997

Risk Disclaimer: The opinions contained herein are for general information only and are not intended to provide specific investment advice or recommendations and are not tailored to any specific’s investor’s needs or investment goals.  You should fully understand the risks associated with trading futures, options and retail off-exchange foreign currency transactions (“Forex”) before making any trades. Trading futures, options, and Forex involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change without notice.  Past performance is not necessarily indicative of future results.


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