Thursday, June 3, 2010

Natural gas on the move - see if it'll bubble upward in new rally

Now that UNG (the natural gas ETF) is pushing above its recent range today, it'll be very nice if it continues upward to test the area from $9 to $12. For that to happens, we'd expect to see $NatGas push above $4.54 and its weekly Bollinger Band midline. The indicators suggest improved technical strength with some positive money flow. So we can start to think a cyclic low has been made and start to think of it being in rally mode again!

We wouldn't want to see it fall lower than approximately halfway back down into its recent trading range. Given its move today, I'm reasonably hopeful that natural gas and UNG are going to cycle higher for a good while. If we are really lucky, "the big low" is over and done and behind us. So we'll see - but first things first! It needs to continue upward in a way that carves out a new uptrend channel along with the indicators continuing to get more positive.

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