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By Mike Paulenoff, www.MPTrader.com
The bull trap (failed upside breakout) above 19.00 on Friday was followed by a stair-step decline that pressed the US Natural Gas Fund ETF (UNG) to a new all-time low this morning at 17.76, which from my technical perspective either represents the conclusion of the entire downleg from the 1/06 recovery high at 25.83 -- ahead of the start of a powerful rally period -- OR initiation of a new downleg that will press the UNG towards 15.00. Right now the vast weight of technical evidence leans towards the former scenario, which if accurate argues for a powerful rally to 20.00 and possibly 22.50-23.00 in the upcoming days. Critical resistance hovers at 19.00-19.30. If hurdled I will get confirmation that the UNG has established a very significant low.
Mike Paulenoff is author of www.MPTrader.com, a real-time diary of his technical analysis & trade alerts on ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international markets, plus key ETF component stocks in sectors like technology, mining, and banking. Sign up for a Free 15-day Trial!
