UNG setup
Long Trade Setup for UNG (Natural Gas ETF) with Fibonacci Support/Resistance Clusters and midterm targets from the daily Chart:
- solid Fibonacci support cluster at 21
- seasonally expecting move up until the end of the year
- geo-political situation might help
- the daily Squeeze just fired long yesterday, so we expect an average of 8-10 bars of daily push power
- breakout to a new swing high yesterday indicates that a new long trend could be established
- Fibonacci-target 1: 23
- Fibonacci-target 2 (and hurdle on the way up): 23.4-23.7
- Fibonacci-target 1: 23
- Fibonacci-target 2 (and hurdle on the way up): 23.4-23.7
My Trade Strategy is to sell an at-the-money Put Credit Spread : Sell GTC Jan15 +21/-23 ATM PCS at $1.10 or better (currently $1.13).
The idea is to have an "edge" from the analysis and to implement the trade with a neutral 1:1 risk/reward, after having paid commissions. If the spread is sold at $1.10, the max risk will be $0.90 + commissions.
If UNG expires in January above $23 you'll make +100% profit, if
it expires below $21 your take the full loss of -100% (this works
like a risk-balanced binary option, that's why I call it 100binOpts). In effect, you need only a $1 move up to make full profit on the trade. If you end up somewhere in between the $21-23 range you'll experience a partial
profit or loss. Of course, partial profits/losses can also be taken at any time earlier than Jan 15.
