UNG Charts

Just last night I was in the car and scanning radio stations and the 5 seconds it was on one local station that carries a nationally syndicated show I heard the words, "Natural Gas" in the context of MENA instability, especially growing instability in Egypt which is the center-piece of stability in the region with Israel and with regard to U.S. energy independence. Everywhere you look, Natural Gas is becoming a bigger part of the national debate.

Today was EIA Natural Gas Inventories and for a 3rd week inventories fell 118 billion cubic feet, down from the prior week's -194 draw.

Released On 2/7/2013 10:30:00 AM For wk2/1, 2013 Prior Actual Weekly Change -194 bcf -118 bcf On a year/year basis, we are getting near the low end of inventories.

 There are no revisions to this data, it is "as released" and I really don't know what consensus was, they use to provide it, but thy don't anymore.

I know there have been 3 consecutive weekly draws, the first one saw UNG rally, the last two have seen it fall, down today -4.24%, but buying UNG on a pullback like this within the context of how I feel about UNG long term is of little consequence to me, actually it's kind of a sale and it may indeed have been a planned sale unless the EIA is leaking again like it use to about a year ago on the petroleum reports.

Here's the charts ad there are a few that are telling us we're at a special area.

 The white arrow is where we really first started paying attention to UNG, the volume was a give away something was changing with the stock. The large ascending triangle is certainly a base, the last yellow box denotes a head fake / false breakout area, which at the time I said would send UNG lower to accumulate to make a real run at a breakout and stage 2 mark-up, where the trend is. After the pullback, so far we've seen a higher high and a higher low, the start of a trend up.

 Here's that same head fake area, the first helped to complete the ascending triangle which made it easy to manipulate technical traders because they have a good idea of the price pattern and what they expect it to do, again you see the higher low and high.

As far as the head fake...

From left to right we have confirmation of the downtrend on a 4 hour 3C chart, leading positive divergences through the base area with relative divergences at resistance (weaker divergences-enough to turn price down, then we get a leading positive divergence around September, it is possible there was a real breakout attempt made here and they found they didn't have the timing in the market or the interest to draw the volume spike needed to signal a stage 2 breakout and abandoned the idea, that's conjecture, alternatively it could have been increased accumulation as the elections looked like they were going one way or the other. What is clear is the negative divergence at the last head fake / false breakout sending price below the triangle, creating a lot of supply to accumulate as stops are hit en-masse. Since, as I first proposed before we even had a break below the support of the triangle, we have a leading positive divergence suggesting exactly what I was thinking, between the supply available on the stops and the lower price, it looks to have been accumulated in some size.

As for some interesting other signals...

Money Stream is showing the same as 3C, large accumulation in a base area.

This is a second version of my DeMark inspired series of indicators on a 4 -day chart, I asked for some help with the name, I have the "DeBrandt". Throw some more ideas my way, or you'll have to live with that!!!

We have 2 major buy signals and 1 sell, note the recent buy is right at the bottom of the head fake pullback, you can't really ask for a better buy signal.

This is the original version on a daily...

Excellent sell signals or pullback and again the same buy at the bottom of the head-fake pullback.

As far as the report and possible leak I mentioned, there was a distribution signal on a 5 min chart yesterday...

A leading negative on a 5 min chart yesterday and a leading positive starting up today, I like price here, as far as an options trade, I'd want to see the indicator lead positive more and a rounding shape like so...

Just as the top rounded, so should the bottom, it allows for accumulation. Note the stops hit exactly at 10:30 and 10:35 on heavy volume, making it easy to pick up a lot of supply at great prices for Wall St.

These are some other indications you can use for momentum, most of these indicators are widely available and quite useful for tactical planning... use them on a 5 day chart for strategic planning, scanning and finding candidates.

 The 5 min-50 bar moving average is widely watched by traders so it can be helpful in knowing where they will react, we want to see the average turn up and price cross above it, although option trades should probably be placed before price turns up.

 I have a momentum indicator on price that went negative yesterday and positive today, Wilder's RSI-NOT RSI which is different and a setting of 6 which is faster than most people use, it went negative yesterday and positive today. If you were short term trading or trading options over a day like we have been, these would be essential signals to sell before you lost momentum and premium.

I also have MACD, but I use a long setting of 26/52/9 or 52/104/9 rather than 12/26/9 as my settings reveal the trend better and they are something no one else is using or seeing. I also have along setting Stochastics of 50 period, I want to get out of short term trades when the embedded green +80 is broken and get long when the embedded +20 is broken to the upside. I want to stay in the trade as long as the signal is embedded, believe it or not, this is one of the best trending back-tested systems I've tested.

Finally, The short term 3C also shows distribution yesterday before the report and a leading positive today, for an options trade I'd want to see some more accumulation and hopefully an entry before price turns up too much.

Remember this is a long term/investment type of trade, give ti some decent room on the stop.