Recovery Rally for Natural Gas

The upmove in the S&P 500 has been natural resource and basic materials related, and natural gas should be a beneficiary.

My near- and intermediate-term pattern and momentum work argue strongly that the US Natural Gas Fund ETF (NYSE: UNG) is in the midst of a significant recovery rally period that has as its optimal target zone 6.20/40 and its "outlier" target zone 6.75-6.90.

At this juncture, only a resumption of weakness that takes out the "tres" lows at 5.40, 5.27 and 5.20 will wreck the current, constructive technical set-up.

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