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Awaiting Next Buy Signal In UNG, Natural Gas

UNG (Natural Gas ETF) is a good example of the benefits of swing trading vs. investing. UNG was recently added as a long swing trade based off the 60-minute time frame with the trade was confirmed by bullish developments on the daily charts of UNG & $NATGAS (natural gas spot price). As the 60-minute chart below highlights, we were able to milk the bulk of the gains following the recent breakout above the 60-minute bullish falling wedge pattern & with the help of that amazing thing we call technical analysis, we were able to book profits within mere basis points of the end of that run and step aside with our profits & original capital safely in hand while UNG has traded in a sideways, go-nowhere range over the last month since then.

UNG 60-minute April 15th

UNG 60-minute April 15th

Zooming out to the daily time frame, while a break above the 7.20 would trigger a buy signal & could come soon (blue arrow), I'm slightly leaning towards the orange scenario of one more thrust down inside the wedge before a lasting breakout. Green resistance levels are my primary targets with the white lines as minor resistance areas along the way.

UNG daily April 15th

UNG daily April 15th

 

I wanted to get this charts out ahead of time in case my alternative scenario (a break over 7.20 sooner than later) happens to occur before I can post an update, although I don't see the likelihood of that happening in too soon as UNG has opened lower & is trading down towards the bottom of the highlighted trading range on the 60-minute chart above (note- that chart was made in pre-market & only reflects through yesterday's close). Bottom line, I am slightly leaning towards some more downside in UNG in the near-term but it still appears that natural gas is at or near a possible lasting bottom of the vicious bear market that began nearly 8 years ago with the 2008 highs.

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Apr 15, 2016 10:04am|Categories: Gold & Commodities|Tags: , |7 Comments

7 Comments

  1. dan123 April 15, 2016 11:56 am at 11:56 am

    Since we had a false breakout on Apr 4th there is a high probability that we will break down. Great chart Randy, thanks

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  2. ben711 April 15, 2016 1:07 pm at 1:07 pm

    Sniper,
    So far GDX plays as expected https://www.tradingview.com/x/NF8z0xdE/
    GLD looks good too https://www.tradingview.com/x/W4zNGm0D/

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  3. Double R April 15, 2016 9:39 pm at 9:39 pm

    Great work on the charts. I hope the orange scenario plays out and we make a double bottom. Thanks for the updates.

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  4. pangblood April 19, 2016 2:10 pm at 2:10 pm

    Randy, Natural gas had a rip up today and approaching your dotted horizontal breakout line, just wanted to alert you and perhaps hear your thoughts, I’m ready to pull the trigger

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  5. pangblood April 20, 2016 12:22 pm at 12:22 pm

    Trade on?

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  6. jacant May 2, 2016 2:45 am at 2:45 am

    Hi Randy, I watched UNG drop 4 days in a row last week before it slowed down. I traded UGAZ Thursday and watched the shorts get a nice SQUEEZE Friday before cashing out. I’m watching it this week and wondering if you had looked at it lately. Thanks for all the market updates!

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    • rsotc May 2, 2016 9:58 am at 9:58 am

      @jacant – Yes, I’ve been watching UNG closely but I just don’t have a very good read or take on the near-term direction although I’m still longer-term bullish. As such, I’m on the sidelines with nat gas right now, leaning towards some downside in the coming weeks if the broad markets & energy sector (including crude oil) come under some selling pressure. Here’s my daily chart with some support levels (yellow minor uptrend line/bottom of channel OR the 6.35 horizontal support level/primary downtrend line backtest):

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