Our overnight position in UGAZ was extremely successful, up over 2 points at market open. We closed the position to avoid intraday volatility, and during the day UGAZ gave back half a point. We expect that UGAZ will probably gain a large amount of value over the weekend, due to the incoming cold front that the weather channel has started calling a “polar vortex” but we feel that the downside risk is too great to hold a position over the weekend.
We’ve also closed CHK below our target price – sentiment is turning strongly against Chesapeake as they were somehow unable to turn recent price spikes in oil and natural gas into a profitable quarter. The price of CHK will not fall, but performance will be disappointing for the time being.
We’ve taken a temporary position in HD with plans to close the position before noon on Monday based on short term technical trends – volatility had been falling throughout the week indicating an impending breakout which came at around 2:00 PM EST and gives HD a new target price of 142.00. HD has crossed its 200 moving average and RSI remains under 70 so it is highly unlikely that we will see any slowdown until at least the end of the trading session on Monday.