Nat Gas Pre Report Idea: 2/19/25 Today I exited my call options, earlier than planned. I had originally planned on exiting my calls sometime before the market opened premarket, New York, on Thursday. But the two days of short covering has led to such a massive move that it prompted me to take my profits early. Fundamentally I am looking at the same thing the big boys are looking at. The artic cold is here, production is down because of freeze offs, LNG at historic rates, big EIA withdrawal tomorrow, contract rollover Tuesday, yada, yada, yada (sounding like a broken record already!) But this is what has moved the price, plus the shorts being squeezed for the last two days (can't wait to see the COT report Friday!) And NG traders love to sell the rally. So with the expected warm up next week, and the weekend approaching, I have been talking about selling my positions ahead of the mass exit before Friday. So I always keep the phrase in the back of my head, "Bulls make money, Bears make money, Pigs get slaughtered!" So I think a $1.00 move in the price is rich enough for me. So I exited my positions this afternoon. As planned, I entered into a 5 block of $4.250 putts that I will hold over the weekend. I am expecting the price to fall back to 3735 level, which is at the 9D SMA on the NGH25 contract. At which time I plan to exit.
I continue to believe that the market is a bit over extended at the moment. The price has moved above the upper SD of the BB on the continuous contract, and blowing past the 3 SD level of the BB on the current contract. On the continuous contract the 100% fib level has been reached, the RSI is approaching overbought territory, and beginning to show signs of divergence, and the RSI on the current month contract is way into overbought territory.
I am firmly in belief that March will be colder than averages, but it must be remembered that the days are getting longer and the HDD going lower. We are five weeks out from the end of the withdrawal season and spring will eventually come. But fundamentally we are in a different place than the previous two years, and can expect higher pricing going into the shoulder season. Which I will begin to discuss in a few weeks. But for now, I took my profits, will ride the price down with the warmer weather coming next week, and will reenter sometime the middle of next week, probably right before next weekend. These have been fantastic weekends to hold over, if your taking the correct position! Which I believe is the case this weekend also. So good luck and fortunes to all.
Keep it Burning!
