UNG Update

Last week, Thursday 4/18 I closed 25% of the UNG long position just as it seemed it was breaking out of the base, I was looking to take some profit and add the partial position back at better prices.

this prompted a wave of emails reminding me that UNG was breaking out on that day with a very strong parabolic move, but the 3C charts were telling me something else so I decided to respond to all the emails with one post...

From that post...

"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".

If you look at the rest of that post, you'll see why I decided to make that move and UNG is now down -2.25% since Thursday and back below or right around the breakout area.

There are several charts this morning that look tempting to add UNG back and had I closed the entire position I may start adding the position back now in pieces, but overall, I think patience is still in order.

Here's a look at UNG now.

 Here's Thursday's move on the EIA Natural Gas report, we took partial profits of 25% of the position in to the highs of this move, now, as suspected, it has pulled back. It wasn't just the 3C charts that were telling me to take some profit and add at better prices, but the fact that a stage 2 breakout on a base this big is a rather larger event, UNG needs to pullback, gather a head of steam and make a run for it fresh, not off an extended run.

 The 3C chart showing profit taking in UNG and one of the reasons for us doing the same at excellent prices. Today we have what I want to see, positive divergences in to a pullback, that's a healthy pullback like the one we are looking for, but this is still an intraday chart.

 I'd like to see this 15 min chart looking very positive as well by the time we add the shares back so I think UNG has room to pullback more.

 The X-Over Screen would suggest a pullback to the blue 22-day moving average, that sounds and feels about right.

The 1 day Trend Channel has held the entire trend since February, +35% and you can see where the current stop is at the red trendline.

However in this instance I would give UNG even more room with a 2-day TC stop, I don't know that we need it, but I see no harm in allowing for it.

Believe me, I want to get back to full strength in UNG ASAP, I love this as a long term long position, but I think the probabilities still favor patience.