By Jeff Clark in the S&A Short Report:

Last month, the price of natural gas broke out to the upside of a bullish falling-wedge pattern and exploded higher. It has since come back down to retest the breakout level, setting up one of the best low-risk buying opportunities I've seen this year.

Take a look…



You see, when a stock breaks out of a bullish falling-wedge pattern, it will often fall back and retest the breakout level. That's exactly what has happened here.

Natural gas is back down to $3.60. It's just pennies above the support of its breakout level. And if that level fails to hold the price up, then the low of the year - $3.35 - provides even more support.

You see, when a stock breaks out of a bullish falling-wedge pattern, it will often fall back and retest the breakout level. That's exactly what has happened here.

So the downside is small.

On the upside, resistance is at about $4.40. But if natural gas is in a new bull market, it should be able to make a "higher high" even above that level. I think $6 is a reasonable target.

If natural gas rallies as I expect it to from here, then UNG should make it back up to at least $18. But if it can get above that level, $25 comes into play.

I know that seems like a long way to go… But keep in mind, UNG started the year at about $25 per share. So we're only looking at it making back what it has already lost this year. That's enough to give everyone who buys the stock an 80% return on their shares. But option traders can make up to 450%.

Crux note: Natural gas rallied around 8% yesterday, and the options Jeff recommended are up over 40% in two days, but as he wrote, there's still lots of room to run. He expects readers to make 450% as natural gas breaks out. To learn more about Jeff's option trading service, the S&A Short Report, click here.

More of Jeff Clark's trades:

Historic shorting opportunity is at hand

The best short selling opportunity of the year

Start shorting: Jeff Clark's trading plan for the next two months