Weather forecasts are back to HDDs continually weakening yet the maps look like there should be more above normal HDDs moving across the US. My first thought is the market is going to test support today.
Pricing is between my support and resistance lines, slowly moving down. I’m obviously not interested in shorting here, but I’m going to take a small chance today if the price will drift a little lower. Fundamentals are not exactly supportive of the market going higher, but the lack of shorting power by managed money is not exactly supportive of going lower. Not to mention pricing, which is not supportive of production right now, and the list goes on.
I’m going to set a limit to buy 1 share of UGAZ at $46.75. 1 share for my $1000 account is just under 5% of funds. So, roughly speaking, I’m going to buy UGAZ at $46.75 with 5% of funds today if the price will reach my target. If this limit order gets filled, I will then place an order to sell UGAZ at $49.75, making $3 on the trade. I’ve had 3 chances in the last 5 trading sessions to make this trade, it would have added 1% to my account. this, to me, is worth the risk of investing 5% in UGAZ at $46.75.
I can place this limit order as a conditional order, to buy at $46.75 with the condition to sell at $49.75. This is nice, but I cannot place this order as a pre-market order. I’m ok with this. If the price falls pre-market, there is a good chance it may fall past my buying mark. The good part of this order, if it buys at $46.75 or lower, it will automatically place the sell order at $49.75. This trade reflects the need I feel to trade more noise in this range. A small amount of UGAZ can go a long way in either direction, thus my reason for only 5% for now.
I will still have my order in to buy UNG at $14.40 with 15% of funds and reduce 38% of my current UNG position at $15.85. Good Luck