Natural gas futures in the April contract settled last Friday in New York at 2.59 while currently trading at 2.63 as I've been recommending a bullish position from around the 2.66 level & if you took that trade you can place the stop loss at 2 different levels with the 1st being at the 10 day low standing at 2.56 as the risk on 2 mini contracts is around $500 plus slippage & commission.

The 2nd stop loss which I'm advocating is at the contract low which was hit on December 21st at 2.48 as the risk is around $1,000 per 2 mini contracts plus slippage & commission as this is a counter-trend trade which I don't recommend very often, but I do think natural gas prices are cheap as the downside is very limited in my opinion.

I think the risk/reward are in your favor despite the fact that prices are trading under their 20 and 100-day moving average, however the chart structure is excellent at the present time as we have consolidated the recent downdraft in prices that took place over the last 3 weeks as the 3.00 level has been incredible resistance, but I do think we could test that level again over the coming weeks ahead despite the fact that the winter season is almost behind us.

This is my only energy recommendation at the current time, but I still am bullish many commodity sectors so play this to the upside while maintaining a proper risk management of 2% of your account balance on any given trade.

TREND: LOWER

CHART STRUCTURE: EXCELLENT

VOLATILITY: MEDIUM