UNG as you know is one of the only long term long positions I like and I believe the only one in the equities model portfolio (as a core position), this is a long term trade and I view and treat it as such.
As for the recent breakout above resistance, we were hoping to see UNG move from a stage 1 base to stage 2 mark up, but for stage 2 mark up we need retail to chase the stock and as mentioned yesterday, retail doesn't seem to be in a mood right now to chase much of anything on the upside. I still think UNG will hit stage 2 and see some nice gains from there, I have no intention of closing the long position there that is currently up 26% with no leverage. I do think UNG will pull back now though.
Here are the updated charts...
Even though UNG is above the base's resistance, there's still local overhead resistance nearby from the bearish descending consolidation triangle.
The 1 min trend confirmation in UNG has turned in to non-confirmation on today's gap up.
The same is true of the 2 min chart, no confirmation of the gap up today.
The 3 min chart looks more serious and looks as if UNG is definitely going to pullback in near term trade.
The 5 min also went from upside confirmation of the breakout to a negative divergence.
Overall the 60 min chart's trend is leading positive and this is why I like UNG long term, but if you look at price, it has broken above the last 2 resistance/reversal ares, the 60 min 3C chart has not done the same so once again we have non-confirmation of this move above resistance of the base area.
I'm hoping we only see a pullback near the base support area around $20, but Wall St. games would almost dictate a break below that support just to shakeout longs, in that case I'll be watching the $16.50 area and may consider adding to UNG if all still looks good in that area, but one day at a time.
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