Tuesday, June 30, 2009

UNG fail

I've been bullish on UNG on all time frames lately but things are turning sour again in the short term. While a symmetric triangle is typically a continuation pattern (trend is down), it looked as if UNG was forming a base and being long I had hoped that was the case. After the symmetric triangle broke out to the upside, the broader market rolled over and killed that rally, hedges were prudent. UNG now appears to be heading down for a test and I suspect a break of the all time low at $12.69. They call natural gas the widow maker because it kills traders. If we look at UNG from the perspective of how it can kill the most traders I think the way to do it would be a quick and ugly break of that all time low. Volume would surge and possibly big buyers would step in and form the bottom there. So at this point I'm expecting UNG to break to new lows and I'll be watching for a quick reversal. I'm out for now.

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