Thursday, December 17, 2009

UNG Popping

Tough call on UNG here. I was obviously wrong on my read this am that "Natgas is topping I think - It is at resistance at least and struggling to get any higher. The turbo boost it got this week from the XOM deal may need to be corrected some." Well. it simply blew thru resistance this am. I was looking for a little consolidation, but they thought differently.

UNG daily - I was a few days off and a few pennies short on my target, but overall very close (that was made in a 12/10 post you can see here). Does the upper TL hold and where does it go from here? It appears to want to be holding based on the spike thru it at this time (Note - it has not cracked this upper TL like this before). The break of the 65ma and a run to the TL has been the MO thus far. The completed 62% retracement and the topping of the 30 and 60m chart indicators look like some resistance is in place here. The daily indicators look to have a little room to run other than a topping S Sto.

The weekly chart may tell the best story. This is as bullish as it has looked in a long time. Clear breakouts of all the indicators. If price can get thru the 20ma and the upper TL, this may be the pop we all have been looking for. See the resistance points for the many targets that lie above if it should pop here. Folks this weekly chart is the main reason I have remained so bearish on UNG for so long. Now these breakouts give me some real hope for more upside. If the 20ma and TL hold, it may be the same old story so keep your stops close. Remember, there is no real reason to be bullish on a price rise other than an artificial shortage created by massive cuts in production.

Do your own homework on this one. Relying on TA alone is not enough as futures pricing really controls the price. I will say the weekly indicators look more bullish now than they have in a long time. this does not mean the volatility is gone, but possibly the bottom is in.  Please refer to the EIA site here for a bunch of good info on NATGAS.

I am long a 15% position in UNG.