EOM Trading Tuesday: DGAZ 11.15.16


Persistent people begin their success where others end in failure.                  Edward Eggleston

My most successful students learn from their financial losses. They turn losses into educational wins and never give up.                                                  DOE

Today the momentum changed with all three major indexes closing in the green. The SPX and NASDAQ had very strong days. Many WTIC shorts covered and OIL closed up $2.60+ per barrel.

Today is “Trading Tuesday,” and I focus on DGAZVelocity Shares 3X Inverse Natural Gas ETN

Key Points…

1.  Trades (3X) in the opposite (inverse) direction of the S&P GSCI Natural Gas Index UNG
2.  Is an ETN
3.  Has a high 1.65% Expense Ratio
4.  No dividend risk if shorting
5.  No options
6.  After previous pullbacks, DGAZ rallied 133%, 188%, 100% and 76%
7.  Previous rally indicators are highlighted-blue ovals
8.  Note; three of the four previous rallies began in November

How do I plan to play DGAZ? I do not plan to short but am looking to play this bounce if money continues to come in after this current profit taking.

Alert conditions…

1.  Price trades over $8, the 11.14.16 close for continued breakout play
2.  Price trades under the 15 SMA Daily or 6 Weekly Simple MA
3.  CMF (20)/MACD Histogram turns from positive to negative
4.  Volume increases 25%+
5.  Slow Stochastics crosses under 20
6.  RSI crosses under 30

In conclusion, DGAZ alerts hit in October when the price closed over the 5-10-15 SMA, and the CMF and MACD Histogram turned positive.

A SS Buy signal hit and the price ran from $5.36 to $9.51. I am looking for profit taking at these levels. If DGAZ resets and makes another run at the previous high, I want alerts to let me know.

If it continues to run, I want an alert for that also-see point #1 above.

Alerts can increase the probability of catching breakdowns/breakouts.

Enjoy your evening,

David O. England

Plan your work, work your plan, and share your harvest! 1 Timothy 2:1-2

This information is for Educational purposes only. It shall in no event be construed or interpreted as an offer or recommendation to buy or sell securities of any kind.

DAVID O. ENGLAND is the founder of the Eye on the Market-Training Academy and Associate Professor Emeritus of Finance. This column is presented for educational purposes only and not intended as financial advice.

If you have a question or comment, contact David England at eyeonthemarket@outlook.com.

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