NAT Gas possible buy entry

Nat Gas has now worked its way down to the lower end of the trading channel I have mentioned previously.

Let get right into the trade:

Volume:

The downside volume is quite weak for the past 3 days.  This could signal a weakening in the bears ability to keep prices going lower.

MACD:
It is not shown on the chart but remains very bearish.  This signals to me that we have not seen the bottom yet even if there is 1-2 up days we might ultimately go lower.

Slow Stoch:

OVER SOLD !  This is why the buying opportunity is almost upon us.  The slow stoch has been over sold for a while now and at some point it should start turning the momentum to the upside.

Trading channel:

We are at the lower end of this channel that is marked by the yellow and purple lines.  I expect a bounce around that level, one more down day could occur or we could go down to that level inter-day and bounce.

Fundmentals:

Weather has been decently hot, and tomorrow there is the nat gas announcement.  There are alot of bulls itching the get into the long side, so if the numbers come in not that great we might see a move tomorrow to the upside.

The Trade:

Entry: Ideally wait for the stock to get closer to the yellow line ($5.13), The closer it gets the less risky the trade will end up being.  But the announcement tomorrow could end up pushing the stock higher if the numbers are terrible.  So waiting to long may end up with a missed chance.  I don't believe I will be considering the trade until tomorrow is over.   Thursday are unpredictable lately.

Exit: Ideally again would be the purple line, but I would adjust my stop loss up to just below the $5.77 area when / if it breaches it.  That level may prove to be too much for a breach so conservatively an exit there would make sense.

Stop loss:
Simply a few cent below the 5.13 level, I would say, $5.00 since that was the most recent low.   But another approach would be to keep a tight stop loss at 5.10, and then attempt to re-enter if the stock price ends up going above the 5.13 level again.


UPDATE 1:

I was pretty happy about the above analysis.  I did however expected it to go down a bit more, but regardless the trade worked out.  See the graph below.

The MACD is coming together will probably signal a cross over early next week.
 The slow stoch has crossed over and trying to get out of the over sold condition.
Where did the move find support? The purple line that I drew yesterday, it was the 38.2 retractment.
There is still upside but the big move was made today.