Wednesday, May 27, 2009

Nat Gas

Usually a good strategy for 'picking bottoms' is to buy when the price exceeds the previous day's high. Then you simply place your stop at the previous day's low. If you were to try and enter a position in UNG using this strategy, today you would have had an entry. However, I like long UNG if it can surpass the $14 mark (the high of 2 days ago). A stop should be placed at 13.3. One thing that worries me about going long UNG is that this 'pullback' has been much more severe than I anticipated, giving it a lower probability having found a bottom.