Nat gas (UNG) has recently caught my attention. While it was in a significant downtrend for the better part of a year it has recently been consolidating right under the $20 level. A look at the daily chart shows a long move down and then recently a sideways consolidation pattern. While this is typically a continuation pattern I am beginning to believe think that the next move may be up rather than an extension of the previous down trend.
Gold and silver have taken more of a back seat over the past 12 months because of their lack of performance after topping out in 2011. Since then prices have been trading sideways/lower with declining volume. The price action is actually very bullish from a technical standpoint. My chart analysis and forward looking forecasts show $3,000ish for gold and $90ish for silver in the next 18-24 months.
Now don’t get too excited yet as there is another point of view to ponder…
We have recently discussed the importance of routinely considering the value of implied volatility in a historical perspective for each underlying before considering any of the various option positions potentially appropriate for trading a given underlying security, index, or ETF. Failure to consider this data represents a major cause of the failure of otherwise favorable option positions.
