UNG Position Update

Thursday I posted Trade Idea: (Swing Trade +) UNG / UGAZ after having given UNG some time to build a proportional reversal process  and Friday afternoon I posted, UNG Should Lift Off Next Week.

I think the trade is likely somewhere along the lines of a swing trade perhaps with a head fake move (hitting stops or triggering new longs) as an extra cherry on top. I'd prefer either UGAZ long (3x leveraged long) or maybe a call position at least out to August 16th if not longer.

I was looking for the possibility (usually a probability) of a stop run within the reversal process which would make for a great entry, but seeing how mature the reversal process is and proportional, right now I'd settle for a long here, however if there are other trade that I'm considering that look to have better profit potential or risk/reward profiles, then I might make a UNG long entry (or UGAZ) contingent on a head fake move to allow for better positioning and if it doesn't do that, then just move on to something else,  I always want the trade to come to me than chase it.

As for the charts...

 This 60 min chart of UNG shows that it is likely to be a longer duration position than say our market (SPY, IWM, QQQ, etc.) bounces.

Looking at price only, there's a very clean downtrend that transitioned in to a beautiful reversal process, there's no head fake/stop run at the lows of the reversal process, but that doesn't mean UNG won't pullback a bit intraday.

NG (Natural Gas Futures) show some smaller intraday negative divergences suggesting some intraday pullback, whether it's enough to form an actual stop run/head fake, I don't think so at this time, but these are all things you may want to consider in determining whether the trade set up is worth it to you.

 NG 1 min with a small intraday negative

NG 5 min with the same.

The 15 min chart is a clean , strong divegrence along the lines of the type of move I expect as seen with several targets below...

There are a couple of gaps that seem very reasonable and easily achieved, the higher gap puts price so close to a potential head fake move that forces nat gas shorts to cover as stops just above former support of a large multi-month range are likely to be in the area, I can't imagine UNG would move so close and not hit that area as well at which time we can look at it again for another potential trade set-up.