Monday, October 17, 2016

Let's Take A Little Break From Natural Gas (UNG)

We made a brilliant call a week or so ago with Natural Gas ETF UNG when it bounced off the support line and then blasted through an overhead resistance at about $9.00. I really like the look of Natural Gas going into the heating season for North America but now an ascending wedge has emerged with divergence on the RSI(5). I think this is going to break down but not aggressively enough to make it a viable short opportunity. I think this is a profit taking opportunity with further buying once the EMA's have had a chance to revert closer to a longer term mean. Please be mindful of the rising support around $9.10 and another support just below it at $9.00, but a very strong longer term ascending channel is emerging.