Morning Thoughts – Protection

If UNG doesn’t make it to $10 today, I’m a bit concerned. Weather is weakening and prices could start oscillating here or just plain fall again. I cannot say with confidence that prices will eventually move higher than this point. I’m not going to talk about fundamentals because it’s mostly about weather. It’s cold, but the market is still oversupplied vs the 5 year average.

I’m going to be cautious and place some stops today. I will have to watch the market as close as I can pre-market open, and then I will place a hard stop on UNG and still just trade UNL manually as the liquidity is a bit too low to be placing a stop order.

Looking NGG21, $2.59ish looks like a good stopping point. I’ll be stopping out of UNG if it falls below $9.35. I hope I’m just being paranoid, but also staying prepared. I think a long stop is necessary as prices could swing a bit more right now and still get close to $3.

What I don’t want, is to ride back to lows holding this heavy position. I’ll be reducing 50% of each UNG and UNL.

Hopefully this is some kind of bull flag/pennant, and it will break higher. If not, I’m prepared, with a logical plan. Good Luck


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