Bought 380 HND.TO @ $7.25, Stop 7.00

I am shorting Natural Gas via the Horizons 2x leveraged bearish ETF (HND.TO). The U.S. Energy Information Association (EIA) released their weekly natural gas storage report yesterday. The underground storage amount is only 4.9% above last year’s level. However, as Shocked Investor points out, last year’s amount was a record high. So 4.9% above last year’s is even higher. Figure 1 shows the two year graph of natural gas storage and the 5-year avearge channel.

Weekly working natural gas underground storage

Coincidentally, natural gas futures was testing $4.50 resistance yesterday (Figure 2) within a prolonged downtrend. As such, both fundamental and technical shows bearishness. So I shorted natural gas with HND.TO today on retracement to $7.25 support (Figure 3). This retracement is due to HND meeting resistance at $7.50 (50% Fibonacci level on the $8 to $7 drop this week).

Natural Gas futures (NG)

Horizons Betapro Natural Gas Bear ETF (HND.TO) intraday chart

As this is a leveraged ETF, I am hoping to close this trade in a few days.

Size: 380 shares

Price: $7.25

Stop: $7.00, with an open stop limit order.

Target: $8.00

Reward / Risk = 0.75 / 0.25 = 3. I am risking 1.08% of my RRSP account in this trade.

Good R/R. Limited risk.

Related posts:

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2. UNG: Long entry stop $12.17 / Exit stop $12.11
3. Bought 300 HOD.TO @ 9.19, Stop 9.05
4. Sold 380 HND.TO @ $7.35
5. Bought 250 HOD.TO @ $11.11