The Longs, Getting Crushed … For Now

The premise for a Nat-Gas (long) trade has not gone away.

The fact this market (UNG) is beating the longs senseless, is a potential indicator in itself.

Evidence continues to mount, uninterrupted access to anything is a luxury; one is prudent to consider the potential effects of supply disruption.

For Nat-Gas UNG, there’s more to the story; it’s following a Fibonacci projection as we’ll see below.

Nat-Gas UNG Daily, Fibonacci Projection

If the projection holds, next lower level is UNG 5.55 area.

As far as where Nat-Gas goes from here, anything can happen; it could even go negative just like the crude futures did back in April of 2020.

Positioning

Nat-Gas: There are no positions in UNG at this point (not advice, not a recommendation).

However, if UNG does decline to the 5.55 area, just the ‘value’ itself will be enticing.

Biotech: While the 3X Leveraged Inverse Fund LABD, posted a new daily low (just after the open), SPBIO, $SPSIBI, indices and the XBI, ETF have not yet posted new daily highs (which would have negated the short trade).

This in a nutshell, is what makes shorting the market with a highly leveraged inverse fund (and doing it effectively) a challenge at times.

The short position LABD-23-13, has been maintained with a new Hard Stop @ LABD 18.40 (not advice, not a recommendation).

Stay Tuned

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

The Danger Point®, trade mark: No. 6,505,279