By Mike Paulenoff, www.MPTrader.com
My overall technical work in the ProShares Ultrashort Oil & Gas ETF (AMEX: DUG) treats all of the action from the 10/17 low at 37.17 to the 11/29 high at 46.56 as the first phase of an intermediate-term recovery rally. The plunge from the 11/27 high to Friday's low at 41.40 (so far) represents an intervening pullback that separates two major legs of a recovery phase.
If my work proves correct, then within a matter of hours the DUG should take off to begin the secondary recovery upleg that should propel the price structure above 46.56 on the way to 51.00. At this juncture, only a break under 41.00 will begin to compromise my current outlook.