After whipsawing to the downside to 4.06 immediately after this morning's inventory data, natural gas futures have reversed sharply to the upside and pierced key resistance around 4.20/21.
Natural gas made a significant multi-year low on March 7 at 3.805. The first minor upmove in a new upleg ended on March 27 at 4.548, after which a correction ensued that ended Monday morning at 3.99.
On Monday we noted to subscribers that the day's upside pivot reversal represented the start of a new upleg, with initial resistance at 4.20/21.
If this resistance level is hurdled and sustained, this should trigger follow-through to 4.35 next, which should be reflected in the natural gas ETFs U.S. Natural Gas Fund (UNG) and iPath Dow Jones UBS Natural Gas (GAZ).
Our projected target after 4.35 would be 5.00-5.20, which should propel the GAZ towards 10.00-10.20.