UNG Update

As has been expected, UNG is pulling back from the resistance level which I believe marks the base and the difference between a stage 1 base and the trending mov of stage 2 mark-up.

I suspected today's EIA Natural Gas resport and how UNG responded, would give us an idea as to where it may pullback to. We still have half a day of trade left, but this is what I see so far.

First the EIA report.

Released On 6/28/2012 10:30:00 AM For wk6/22, 2012

Prior Actual Weekly Change 62 bcf 57 bcf

There was an injection on 57 billion cubic feet, this is higher than the 50 bcf injection expected, so this is not good news for UNG near term.

UNG's charts...

 The move yesterday just above resistance... I suspect we will see a pullback to the lower trend line of the ascending triangle I have drawn here, however we'll have to let the market tell us-meaning letting the 3C signals develop.

 Here's this morning's trade before the 10:30 release of the report, obviously not a good reaction as there was more supply than expected.

 The resistance area I've been talking about on a 30 min chart. We have a negative divergence all the way out to the 30 min chart, this is the reason I suspect we will see a little deeper pullback to the triangle's lower trendline.

 At 60 mins. the previous test of resistance ended with a negative divergence, this one stayed in line so it appears UNG is continuing to improve as we would expect to see in a maturing base.

 The intraday 2 min chart shows a negative divergence and a small positive today.

 Here's a closer look, I suspect the intraday positive divergence is simply holding UNG in an intraday lateral consolidation.

 The intraday positive pretty much ends at 5 mins, this is why I suspect this is just an intraday pause, but we still have plenty of time for the charts to develop.

The 15 min is negative, another reason I suspected a pullback in UNG, however a case could be made for a relative positive divergence, we'll have to see if it holds.

For now, I'd expect a pullback in UNG, but I believe this is the healthy type consolidation/pullback that stocks often need so they can re-charge before trying to tackle an important resistance level.