Natural Gas Reaches Resistance

We wrote Wednesday that we expected the U.S. Natural Gas Fund (AMEX: UNG) to be repelled on its first attempt at 40.60 resistance, and sure enough this morning's high was 40.60, at which point the UNG abruptly reversed to the downside with some power in what my work is telling me is the conclusion of the first upleg off of the 12/27 low at 33.58. If my interpretation of that pattern is correct, then after this pullback run its course the UNG should rocket into another more powerful advance that hurdles the resistance line at 40.60 on the way to 44.00/50. I will stay out, looking for 37.50/10 for re-entry into the long side of the UNG.