Chart Request -DUG

DUG is an inverse ETF which if bought log gives you short exposure to the Oil and Gas Services industry.

The Charts...

 DUG 3C daily chart-there's a price pattern called a bullish descending wedge in the white box, the same place there's a 3C positive divergence suggesting accumulation has been ongoing into lower prices.
The divergence in June shows price making a higher high and 3C failing to confirm that high.

 The 5 min 3C chart also looks bullish. Note the different divergences both positive (white) and negative (red) and the resulting price moves. Right now the 5 min is in the strongest type of divergence and that is a leading divergence as 3C makes new highs despite the price not doing the same.

 I don't know what happened with my text box, but it's a long trade stop using the trend channel, it should say $34.40, although since there hasn't been a breakout of the wedge yet, I might consider a wider stop. The trend channel has worked well with DUG-if you initiated a short trade at the small red box, you'd still be in the trade as there have been no false stop out signals and you'd have a profit of 17-19% assuming you didn't add to the position.

You may wish to enter the trade or phase into it in this area, but the breakout of the wedge will occur around the $35.40 level and $36.40 will take out the first zone of resistance. The implied target is a bit above $44.00, although that's just the target from the wedge, it could certainly run higher.

I like the positioning in this area. A word of warning though, these wedges have been forming bases after breaking out. This one may be different as it is related more closely to commodities, it's for this reason that I'd consider a wider stop or you may want to chose the tighter stop and be able to give the trade a few shots until you get the right positioning. Pro traders will often take 4-5 shots at the same trade and then get good positioning, all while keeping losses small. Amateurs loose too much on their first shot and then walk away from a good trade.