(Tuesday October 29th) Hi Trader, UNG is lagging behind the spot price, so it's probably worth trading soon.
| UNG (United States Natural Gas ETF) Direction: Long |
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Today we will be looking at UNG for a potential trade to the upside but first, we will look at the spot price of Natural Gas, which UNG follows closely. Natural Gas made a higher low on the 11th of October right at a 0.786% Fib retracement level. If we draw a Schiff pitchfork, then you will see that price is currently trading near the center median line and slightly below a 1.382% Fib extension level. Resistance might come in at these levels and halt this upwards move temporarily and give us a minor retracement. If price eventually breaks above the center median line, then there is a possibility that it could target the highs set on the 17th of September. |
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If you look at the chart of UNG, then you will see that price follows the spot price of Natural Gas very closely with the previous major swings falling on the same dates. UNG is, however, lagging slightly behind the spot price, which is probably due to the difference in trading hours. |
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Since UNG is lagging behind the spot price, it might be worth getting into a long position IF UNG stays near to yesterday's close at today's open. One thing we have to be mindful of is that price tends to fill previous gaps (red ovals). This leaves us with two options: a) If price gaps higher at the open, then place a Buy Limit order at 20.26. b) If price gaps lower at the open, then place a Buy Stop order at 20.26. Note: Wait for the market to open first and then depending on how it opens enter the correct order. If we do get filled, then a stop can be placed at 18.48 with one target at 23.67 |
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