Sunday, August 16, 2009

UNG Time

Many emails asking for a UNG update, so here it is. I'm looking for continued weakness thru the end of the year, then the trendlines on the indicators run out of room to fall as well as the falling wedge will play out. Even then I am not expecting a big pop then as continued weakness in overall economic conditions persist. It may just form some sort of range bound bottom I'm guessing and this may just be the beginning. The major downtrend line is busted, but the reaction to that was to form a falling wedge. Thus, IMO the bottom is being set, but will remain in place fro a long time.

The divergences on the 60m say a pop will possibly be coming soon. The gap around 12.20 may provide support or be a target price is after. The daily appears near a bottom and the weeklys are coming up on trendline support. The lower BB and trendline jive really well around 11.74. Don't just look at the 60m chart and call it good. To get in tune with price movement, you need to look at the daily and weekly indicators as well.

Trading UNG for 10 to 20% pops is a good thing, but looking for it to kick some serious butt and make a major move is insane. The fundamentals are not there. Remember a few UNG posts back I spoke of contango and the forward price? This is the true key to trading this. If you have knowledge that the forward prices are higher, it will go up. If not, then the slide continues as the contango evaporates. That being said, as long as production is being cut and demand continues to fall, don't be looking for any miracles here.

I expect new lows to be set before this is all over. Links to the daily and weekly charts are below. GL trading.

60m UNG viewed better here.

Daily UNG viewed better here.

Weekly UNG viewed better here.


  1. shank, gap at 12.15 from july 14 filled

    that doesn't make you bullish?

  2. Nope, but closer to being bullish. Daily indicators not bottomed yet. Look at the 20/50ma action closely on the 60m chart. If the trend holds, buy when price crosses the 20 and hold till the 20 turns. The 20/50 cross is a confirming indicator to add more to the position. Daily S Sto may be getting ready to turn, but RSI does not look to hot at this moment. Of course that could change quickly. Slap a 20ma on a 60m UNG chart and keep a close eye on it.


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