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.
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