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By Mike Paulenoff, www.MPTrader.com
Although I did not expect the ProShares UltraShort Oil & Gas ETF (AMEX: DUG) to plunge from Wednesday's recovery rally high at 30.47 to retest the 5/21 pivot low at 25.41, the fact that it has, and that the price structure held the prior low and has reversed to the upside, suggests strongly that the DUG has found a very substantial support plateau from where a major countertrend advance will base and climb during the upcoming days and weeks. The base area encompasses 26.00-30.00, which itself is a 15% move. Furthermore, an upside breakout from the base area would then trigger follow-through potential that projects to 32.50 and then to 34.20. At this juncture only a plunge that violates today's low at 25.95 will wreck the developing chart set-up.
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!
