The panic is over. On my last post NG Feb 25, with market opening of HVU $4.02 I said, YES, this will go lower. As traders a storm was present, severe enough to effect short term our position long or short.
My preference is DGAZ verses HND. I am satisfied that I remained off NG market commencing weekend Friday Feb 22 while awaiting the DGAZ entry week of Feb 25 to March 1. As we move into March I am confident to be aggressive on the hold of DGAZ trade here as planned. I will state I had seen a range hold sideways for some time being equivalent HND $4.00 to - $4.40 and something would break out that range which was the lastest winter storm. Fact is days are getting longer and weather now resumes a march in March to warmer temeratures. Unless a Tsunami, NG will fall on spot this month.
I set thus a new range possible UGAZ $16 to $18.00 with a spread 11% top to bottom. I need to accumulate there. Note -- DGAZ has 1.3 times volatility verses HND. Thus HND range spread is $4.00 down to $3.65 approx as buy range. Using this, I first filled DGAZ this week at $18.00 and $17.25 both before Thursday report. My initial a/c pre-report established.
I had bid to get DGAZ $16.50 post report (which almost filled pre-report on Wed missing by 10 cents). I have held that bid open which expires Thursday March 7th. The $16.50 fill did not occur despite a promising open on DGAZ to spike below $17.00. Post report, being in 60% of allocation is not a problem. I watched the two opening bottoms on the second down spike early morning trading as MM cleans out initial day traders. I did chase the upside and bought another 1000 at $17.48
Before next report I will hold the 5000 shares on DGAZ. I need to be patient first, aggressive second. Possibly 1000 share $16.50 bid fills pre-report of March DGAZ / UGAZ always brings forth a surprise. Whatever comes, I will be more aggressive to complete position next week. It at this time does not seem likely the bottom range target is vulnerable. I am comfortable to add balance in $18.50 to $19.50 range which would be available. First patience.
Factors to consider on the NG trade as we move forward:
The EIA states output was down in Dec, that is a concern to a DGAZ trade. Next, we are quickly going to close in on April and not lose sight of that on exit of trade. The weather is at this time for April an uncertainty. Trade current and month forward expectation, no further out to use a trade range. If we see a very warm spring as last year the expected upside to DGAZ could be 60% of expectation from my objective if holding beyond 3 weeks to make a return range of 60% to 100% -- and may require 1 to 2 complete flat exits to get there.
I am bullish on only one item --- making money whether on UGAZ or DGAZ and I have learned to be more patient and not have a ‘greedy ’ mindset to achieve those goals nor sit in hope.. I will take what comes as expected from the weeks forward assessment I make.
GLTA Cheers manxcan