After whipsawing to the downside to 4.06 immediately after this morning's inventory data, natural gas futures have reversed sharply to the upside and pierced key resistance around 4.20/21.
Natural gas made a significant multi-year low on March 7 at 3.805. The first minor upmove in a new upleg ended on March 27 at 4.548, after which a correction ensued that ended Monday morning at 3.99.
On Monday we noted to subscribers that the day's upside pivot reversal represented the start of a new upleg, with initial resistance at 4.20/21.
If this resistance level is hurdled and sustained, this should trigger follow-through to 4.35 next, which should be reflected in the natural gas ETFs U.S. Natural Gas Fund (UNG) and iPath Dow Jones UBS Natural Gas (GAZ).
Our projected target after 4.35 would be 5.00-5.20, which should propel the GAZ towards 10.00-10.20.
Mike Paulenoff is author of www.MPTrader.com, a real-time diary of his technical analysis & trade alerts on ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international markets, plus key ETF component stocks in sectors like technology, mining, and banking. Sign up for a Free 15-day Trial!
