I have two standout Fibonacci price cluster zones in UNG (United States Natural Gas Fund, $21.20, up $0.05. 12-month range $15.18 to $24.09) to watch for a possible buy entry.
The definition of a price cluster is the coincidence of at least 3 Fibonacci price relationships that come together within a relatively tight range and they identify key support or resistance decisions.
The first support comes in at $20.74 – $20.93. The second zone that I would PREFER to see tested comes in at $19.94 – $20.21. As long as price remains above either of these zones, I will be looking to take buy triggers against it with my risk defined below the low end of the price cluster zone.
If there are no entry triggers, don’t take a trade!! A hold above one of these zones targets the 25.00 area on the upside.
Implied Volatility with 21-strike calls in June & July options virtually the same @ ~31.5%. Premium received to sell 24 or 25-strike call as part of vertical spread not there. Bullish strategy could perhaps be half position in shares and other half in long at-the-money calls.