UNG Follow Up

To answer a bunch of emails all at once, "Yes I am aware that UNG is braking out through the base in to stage 2 mark-up with this move this morning".

I have a lot of emails asking about that because this position has been one we have been following, buying and adding to for well over  year with some members having a 50+% profit and it hasn't even moved to stage 2 mark-up yet. This is my favorite primary trend long position and that' why I could NEVER close the entire position for any reason, but as far as the 25% today that was filled at $23.74...

First of all, UNG is the only position I violated max position size as I decided to add to it for occasions just like this, in adding to it, the final size is about 25% which is 10% too big and raised the average cost to $20, but also allowed the position to make more dollars because of adding to it (averaging up your winners instead of averaging down your losers) which gave the position about a $4300 profit with no leverage rather than a $3000 profit or so at a better cost basis.


Here's the 10:30 EIA Nat Gas Report that started this move: Prior -14 BCF, Today's report at 31 BCF at consensus of a build of 35 BCF so the build was less than expected.

 Here we have the breakout move at the 10:30 EIA Natural Gas Report, this is a very parabolic move and these tend to end badly, also in the white box all of the candlesticks have tall upper wicks meaning higher prices were first rejected before moving up and this is above resistance of the base's neckline.

 The EIA reports used to be the most consistently leaked reports out there, especially the Petroleum on Wednesday, but they have been a lot better recently, although this one is questionable with strong accumulation Tuesday. We also do not have 3C confirmation of the move.

 Longer term in the 15 min chart we have good confirmation except very recently where UNG looked like it would pullback just before taking on the base's year long resistance level. I would think that whoever took some profits off the table in expectation of a pullback to add back at lower prices will probably still want to see that happen, being it's a 15 min chart, that's not retail.


 Here's the breakout above the base highs today

 And volume/candlesticks on a 5 min chart at the same level, note candlesticks saw significantly smaller ranges per bar after passing resistance as well as having longer upper wicks (resistance).

Finally the 5 min momentum chart for the last 2 days (approx) shows RSI losing momentum, MACD and Stochastics. It looks very much like UNG was going to pullback in order to build up a head of steam just before attempting the breakout being that we've had a 34% run since February accumulation lows on a "W" base ; there have been decent, healthy pullbacks during that trend, but there hasn't been one since 4/5 so it seemed to be a good time for one just before taking on resistance and moving to a long awaited Stage 2 mark up.