DGAZ Update

It feels like we just talked about DGAZ/UNG, oh, of course, we did yesterday.

In yesterday's post I shoed a significant long term or large negative divegrence in Nat Gas futures so the pullback in UNG is likely to be more than our average pullback and DGAZ is up between 10.50 and 11% today.

I think there will probably be some chop still in the area before a real clean break, but whether there is or not, it doesn't change my plans for DGAZ (long) one bit. I won't close DGAZ until I see UNG is putting together a base and accumulation and it is really just starting a mini stage 4 so it's no where near that eventuality yet.

Lets take a look because I know a lot of you have stuck in there with DGAZ, take a look at the Nat Gas charts posted yesterday linked above and these below from today, I think you'll feel pretty good about having held tight to DGAZ.

 DGAZ's volume doesn't stand out, but it's the things that others don't notice that give you the greatest edge, true volume is not 4x average for the last 10-days, but it is increasing on the up days, that's all we need and the reversal process can be seen clearly.

This is sloppy inverse H&S mentioned yesterday, I think there may be some backing and filling of some of the holes, but it doesn't change management of the position at all for me, the long DGAZ stays open.

Here DGAZ is in line/confirmation on the move up today.

To give you an idea of the expected UNG pullback, this is a 60 min chart, be sure to see the Natural Gas futures I posted yesterday, it should be a strong pullback and DGAZ should do very well.

The 30 min chart, note both were in line and then went negative

The X-Over system applied to UNG, the first pullback is to the 10-day, second is usually to the 22 day, but in this case I think we move closer to the breakout area.

I drew a squiggle that represents (yellow) the probable filling of some holes, but ultimately if you place the candlesticks I drew under price just under today's, this is the general trend I'd expect and likely wouldn't close DGAZ until we wee momentum fade, the reversal process start and accumulation confirm it and I think it will be around the red trendline, maybe even a head fake below it.

Good luck!