Recommendation:  Buy August 2014 $5.200/5.500 Natural Gas call spread

  • Risk:  $750.00 each before commission and fees

  • Potential: $3,000.00 each before cost

  • Expires:   July 28, 2014 or 95 days

Commentary:  On April 17, U.S. Energy Information Administration said inventories of Natural gas are 54% below the 5-year average.  The daily chart below shows Natural gas prices above the 20-day and 100-day averages.  In my opinion, a triple threat of low inventories, bullish chart structure, and a history of rising prices during summer months will create potential for natural gas prices to spike.


Natural Gas Spread

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