UNG Follow Up

Yesterday I posted a pretty complete update of UNG, which is probably my favorite long term (long) position, one which I almost consider as more of an investment rather than a trade. I believe Natural Gas is going to enter a secular bull market regardless of what the broader market does. UNG is still within a base so it hasn't even broken out yet to stage 2 or mark up (what most people would call a bull market or trending trade).

I saw a good opportunity yesterday to possibly be able to buy UNG which is gathering strength, on a corrective pullback.

Today UNG is up and that is largely because of the EIA Natural gas report which looks like this on the face of it....

Released On 1/17/2013 10:30:00 AM For wk1/11, 2013

Prior Actual Weekly Change 201 bcf -148 bcf

Looking at this headline print we see a HUGE draw in Nat. Gas in storage which is VERY bullish, however this is the first time in the EIA reports that the report has broken down storage in both salt caverns and non-salt storage facilities, the salt cavern storage sites are typically much more volatile as far as injections and draws go. However cutting through all of that, Nat Gas still saw a 2.8% and 3.8% decline for salt and non-salt facilities respectively so either way it's bullish and UNG reacted to the report, I don't think it negatives yesterday's post and the opportunity though.

Here are the charts backing up my opinion.

 Here's a 1 min chart of UNG with the reaction to today's 10:30 a.m. EIA Natural Gas Report.

 The long term 4 hour chart (VERY influential) shows what I showed yesterday, the last breakout attempt was a purposeful head fake move (yellow) which at the time I suspected would be used to send UNG lower so it could be accumulated by smart money in size and at lower prices, I still think that's true, but we do have a large positive divergence with UNG know turning back to the upside.

To be clear, considering the longer term nature of UNG, I think it's a but anywhere in the area, whether today or on a pullback, it has tons of potential.

 This is an influential, but less powerful chart than the 4 hour above, this is 30 min and it suggests not only a positive trend in UNG, but also a corrective pullback which can be used to buy UNG at lower prices, the whole idea of yesterday's post.

 The intraday 1 min chart today is following price exactly or confirming price, however there's no sign of a positive divergence at all, so as far as I'm concerned, the pullback probability is still high.


Just to check, this is the 2 min chart, again nothing positive in the VERY short term, in fact it points to a corrective pullback, one which I'd like to be a buyer.

However as I said before, I wouldn't haggle over a few percent with UNG, I would save room to add on a pullback, but I'd want to have a position started in UNG by now.

Today's price action doesn't seem to change yesterday's analysis at all, it's just reactive action.