Trade Idea: Range Trade Q1/Q2 MOPJ Spread

Vincent Wu’s recommendation this week is to range trade the Q1/Q2 MOPJ Spread, the Asia Naphtha benchmark. In light of Naphtha’s seasonal strength, he advises range trading the spread with a bullish axe. The MOPJ spread has been fluctuating and rangebound over the past month between $14 and $18/mt, with an average true range of around $4. Buy the lows and sell the highs, and closely track the twenty-day moving average. The exit condition is to close the trade as the volatility and ATR die down.