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In sympathy with today’s upmove in crude oil, natural gas prices have lifted, too, off of their extremely oversold condition, which also has lifted the U.S. Natural Gas Fund ETF (NYSE: UNG) from yesterday’s Double Bottom low at 12.69 above key near-term resistance at 13.80. Whether or not today’s up-spike is the beginning of a sustainable recovery phase remains to be seen. One thing is for certain: the oversold condition supports a recovery rally to 15.50 at a minimum from current levels; however, I have seen firsthand that more than an extreme oversold condition is required to sustain an upmove in the UNG. I will watch from the sidelines for a while longer to see if today’s upmove holds, or if the micro pattern carved-out from 12.69 exhibits bullish form, either of which will compel me to re-enter the long side.
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!
