UGAZ Nat Gas Leveraged ETF +5% in our Friday Trade
by Mike Paulenoff
July 1, 2017 • 12:00 AM EDT
Last week we noted our 5.6% trade in the SPDR S&P Biotech ETF (XBI). We continued to be bullish on the XBI, and had a target of 79-80.
This week the XBI met our target and then some, reaching 80.89 before closing the week at 77.18.
There's a risk down to the recent upside breakout in the 73-71 area at some point, which, if it contains the weakness, could provide the launchpad for a thrust towards 100 in the very big picture.
Another sector we follow closely is Natural Gas. On Tuesday of this week we told our members to watch for movement off of Wednesday's release of weekly Nat Gas inventories.
We noted that the release could trigger a downside stop-fest that presses Nat Gas back under 3.00, into the 2.90 area support, where my work argues in favor of establishing or adding new long positions ahead of upside potential again into the 3.30-3.40 target zone.
On Wednesday's release, Nat Gas initially popped to challenge June resistance at 3.10-3.11, but stalled there and a bit later in the session pivoted to the downside into a nosedive that violated nearest term support at 3.066.
As it dropped towards our preferred support area, we added a position in the VelocityShares 3x Long Natural Gas ETN (UGAZ) on Friday at 13.17. By the close, the UGAZ was at 13.82, giving us a +5% yield on our trade for the day.
Have a great weekend!
Mike Paulenoff is the author of MPTrader.com, a real-time diary of his technical analysis & trade alerts
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