$UNG Chart Review

Seasonality Chart

Quick review shows that that August to September is typically a consolidation period.

Seasonality

 

Commitment of Traders Chart

Producers and Users were previously at highs.  This suggest that they were locking in the current price of natural gas as they felt it was priced near highs.  The recent drop suggest they may anticipate a slight drop in prices.

Money Managers have been slowly increasing their exposure.  This is bullish but not exhaustive.  Meaning there is still room for buyers.  I would speculate that dips would be bought moving forward.

CoT.JPG

 

Wyckoff Accumulation Schematic

Accumulation

 

Wyckoff Distribution Schematic

distribution

 

Point and Figure Chart

We can appreciate that prior support is in a position to become resistance.  The green lines on the chart show that price have not reached their upper price objective of $7.92.  If prices are unable to remain above this “key” level they are at significant risk for breaking down.

PnF chart

 

Bar Chart

My first observation is that UNG is trading within a BULLISH ascending trading channel.  We can appreciate that prices became “overbought” in June/July relative to that channel.  They have since undergone DISTRIBUTION for which the downside target has not been achieved.  I believe this creates additional risk for long entries and prices will:

  1. Break down
  2. Take some considerable time for bulls to absorb supply and trade sideways

You can appreciate that if prices breakdown to my current price objectives they will test support defined as the lower trendline of the channel.  Prices at this level will also become “oversold” and will likely be bought.

barchart

 

Conclusion,  I see prices rallying into $7.95-$8.00 before breaking down to $7.20.  You can #timestamp that.

They don’t call natty the “widow maker” because it is cute.

Good Luck!

 

 

 

 

 

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