Now this is what I call a smooth set-up. The weekly UNG Natural Gas ETF chart implies a significant change has happened. The volume pattern is all you need to look at to see that perception has changed. A new uptrend might be in the making. The recent surge occurred on huge volume. What is really bullish is the fact the tremendous volume came in while trading above the weekly moving average 30. Then UNG put in a tight consolidation and pulled back towards the rising long-term moving average. For more thoughts on buying pullbacks towards rising moving averages check this Tischendorf Letter Interview. This is usually one of the best technical entries you can get. It offers enough confirmation to act upon while still offering a rather low risk entry. This is obviously not a pure momentum play with a long-term uptrend in place. On the other hand it offers the opportunity to start a low risk initial position at the beginning of a new uptrend. Aggressive players can buy UGAZ the 3X ETF. It goes without saying that leveraged ETFs suffer from time decay and are not the perfect instrument for long holding periods. If you buy them at the beginning of a thrusting move they tend to do a pretty good job. I took an initial position with UGAZ.
Click on chart to enlarge:
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