UNG Follow Up

The last time we looked at UNG it was pulling back, which is fine with me, this is what normal, healthy stocks do, although anything in the Energy complex can have a certain level of volatility beyond what you might otherwise expect and anything in a base formation like UNG or a top formation is always going to see increased volatility.

What I was hoping to see in UNG was a rounding or "U" shape bottom to the pullback, this is more about the process of accumulating a pullback than it is just simply looking for a price pattern and not understanding why if you were asked.

Yesterday there was some nice momentum in the underlying trade and today we are on the second half of that "U" shape with volume up to now looking perfect for the turn. Tomorrow is EIA natural gas inventories, the last two weeks have both seen a draw down, the first week rallied, the second (last  week) pulled back, although I'm not convinced the report was the real reason, but rather a cover.

Here are the current charts, all in all UNG is in a favorable area when looking at the big picture, which is our expectations are, this is a long term secular long.

The "U" shape we were looking for in UNG's pullback...

And the 10 min chart exploding off the bottom of that yesterday.

As I said above, all in all I still think UNG is a fine purchase in this are so long as you understand it is in a volatile base and it is a long term play.