Natural Gas ETF Poised For A Breakout?
In today's trading action, shares of the United States Natural Gas Fund (NYSE: UNG) have erased losses sustained over the last four trading sessions, currently up 2% to $22.33.
As the one year daily chart below shows, shares are once again making a run at a key resistance level ($22.72), which dates back to February of this year. After hitting all time lows in April, natural gas has been slowly rebounding, making a series of higher highs and lower lows in the process. Both the futures (/NG) and ETF have been on a tear recently, finishing higher in twelve out of the last fourteen sessions - a 16% gain in that time.
Should the fund manage to break resistance, look for a quick run to the next resistance level of $23.92. Beyond that, no resistance comes into play until $27.00.
If shares should fail to break $22.70 once again, however, look for a 50% retracement of the recent move to around the $20 mark. $21.40 has served as support over the last five trading sessions. If that breaks, it may serve as a good short entry point.
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