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Natural Gas (UNG) Coming to Life

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I have been watching the Natural Gas ETF (UNG) as a potential trading vehicle for about a year. My attention is focused on the long side, but opportunities of that nature have been limited. There was a rally of +65% last summer, but that reversed in August, going into a new low in December. With the new administration being extremely hostile to fossil fuels, the potential for reduced supply is giving UNG a boost.






Technically speaking, a promising triple bottom has executed into a breakout. Note the prescient positive divergences on OBV and the PMO, formed as UNG was making its new low in December. Another interesting feature of this chart is the longer-term potential double bottom between the June and December lows. We need to view this in broader context.



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Looking at a weekly chart, I'd say that the June/December double bottom is very promising. The price pattern is well-formed, and the weekly PMO has formed a positive divergence and is rising.


 CONCLUSION: The fundamentals and the technicals are currently aligned nicely in favor of an extended rally in UNG. Please note that this is an opinion, not a recommendation.



Technical Analysis is a windsock, not a crystal ball.


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Carl Swenlin
About the author: is a veteran technical analyst who has been actively engaged in market analysis since 1981. A pioneer in the creation of online technical resources, he was president and founder of DecisionPoint.com, one of the premier market timing and technical analysis websites on the web. DecisionPoint specializes in stock market indicators and charting. Since DecisionPoint merged with StockCharts.com in 2013, Carl has served a consulting technical analyst and blog contributor. Learn More
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