Sometimes taking some off the table in a position like UNG (even though they are calls and I have an extremely low tolerance for pullback/consolidations or loss of momentum in options), people start to wonder whether I've changed my mind about a position and especially UNG which I really like as a long term play.
I believe when the April Calls were mentioned last week, both the advantages of a short term or longer term move were touched on, it was kind of a win/win either way. I haven't changed my mind on UNG, I don't have doubts, it really says more about my thoughts on leverage than anything. IF you think about it, that 2 day trade is worth more than the entire move in the S&P-500 over the last 8+ months if you bought at the very bottom and sold at the very top with a lot less exposure risk.
So here are some UNG charts, both short term and long.
Last week UNG was really looking like it was getting ready to make a nice move to the upside, this is why I'd prefer a little leverage, although if I was establishing or filling out a long equity position, I'd like that area just the same.
As for today, UNG was bumping in to very short term resistance and left a gap below it, this market has been ruthless about filling gaps the last several years like I've never seen before.
UNG's intraday 1 min chart was losing momentum as well as price being at near term resistance.
As far as a little longer term and this being a decent looking bottoming area, this 10 min chart's positive posture looks good.
On the daily chart we've looked at this last head fake breakout a lot of times and the gist is, it looks like UNG needed to pullback and gather energy before it makes the move to the next stage, ark up.
On a long term 4 hour chart, the trends become clear, the yellow arrow is that head fake area with a negative divergence and the pullback has a leading positive divergence, so I can't see how I cannot like this one, especially here.
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