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TFC Commodity Trading Forum

Re: Nat Gas #2/Lee

Always keep in mind whether the RSI 21 is above or below the 50 line. Below is bearish. But with a volatile market you can see whipsaws and increasing the length wont help. But NG v1 has been below the 50 line on the Daily chart since mid June other than a peak above it in mid July. Same with the Modified MACD that is also telling you it's a bear. But as they say price is king and the chart pattern has converged to a tight pattern and at a two year uptrendline and at the time of year 2009 and 2010 bottomed. So it's time for a break one way or the other it seems. Gotta watch you don't look with a magnifying glass as breakouts need to be clear and stay broken out and move sharply in that breakout direction. Nothing worse than seeing a false breakout that reverses back and blows every one's socks off. But your chart does show a converging pattern short term and is a classic example of a market that 'should' move sharply out of that pattern short term and even longer term. That's why I said an Option Strangle on January Nat Gas would be the play I woud think. Two or three strikes out of the money on both sides would be my bet.