UNG Natural Gas ( Unleveraged) ETF Long
Updated
On the 4 hour chart- UNG had a head and shoulder pattern in May from which it descended
in a gradual fashion from May 25 to June 2nd and then reversed upward. The reversal occurred
at two standard deviations below the mean anchored VWAP and so deep in the oversold
area. Price has crossed over the higher VWAP line and so is in the band between the mean VWAP
and one standard deviation below it. Volumes have been persistent. Importantly, the zero
lag MACD shows the lines in parallel and crossing the zero horizontal line from underneath.
I see UNG properly set up for a long trade. Fundamentally, the hot summer may bring
increased natural gas consumption to make electricity for air conditioning. The dam disaster
in Ukraine may close down the biggest nuclear plant in Europe because of cooling
lakes potentially compromised. Natural gas may be an alternative fuel to make electricity.
Compressed NG from the US may become more important to Europe, especially since the
Nordic Stream pipeline issue developed. All in all, I think natural gas prices are likely to rise.
in a gradual fashion from May 25 to June 2nd and then reversed upward. The reversal occurred
at two standard deviations below the mean anchored VWAP and so deep in the oversold
area. Price has crossed over the higher VWAP line and so is in the band between the mean VWAP
and one standard deviation below it. Volumes have been persistent. Importantly, the zero
lag MACD shows the lines in parallel and crossing the zero horizontal line from underneath.
I see UNG properly set up for a long trade. Fundamentally, the hot summer may bring
increased natural gas consumption to make electricity for air conditioning. The dam disaster
in Ukraine may close down the biggest nuclear plant in Europe because of cooling
lakes potentially compromised. Natural gas may be an alternative fuel to make electricity.
Compressed NG from the US may become more important to Europe, especially since the
Nordic Stream pipeline issue developed. All in all, I think natural gas prices are likely to rise.
Trade active
My first target is 6.85 midway between the POC and the mean anchored VWAP line. The final target is 7.35 which is the pivot highs of March and April.Trade active
Partial profit taken as XNGUSD had considerable momentum at the first target. Final target for 2/3 of the position is raised to 7.5
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