Significant Low for UNG?

By Mike Paulenoff

The bull trap (failed upside breakout) above 19.00 on Friday was followed by a stair-step decline that pressed the US Natural Gas Fund ETF (UNG) to a new all-time low this morning at 17.76, which from my technical perspective either represents the conclusion of the entire downleg from the 1/06 recovery high at 25.83 -- ahead of the start of a powerful rally period -- OR initiation of a new downleg that will press the UNG towards 15.00. Right now the vast weight of technical evidence leans towards the former scenario, which if accurate argues for a powerful rally to 20.00 and possibly 22.50-23.00 in the upcoming days. Critical resistance hovers at 19.00-19.30. If hurdled I will get confirmation that the UNG has established a very significant low.

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