Watch For The ‘Bounce’

Nat-Gas, UNG, is at support right now.

So, what happens next?

Before we get to that, let’s first be aware of what’s being presented to the public. This recent link, says that upon increase in production, ‘go short’ (absolutely, definitely, not advice, not a recommendation).

So, the advice is, somehow tie the fundamentals to a trading action?

Given that going short on increase of production would even work (I wouldn’t do it), how is anyone going to figure out whether those numbers are real?

So, we choose not to play the game and instead, go straight to the truth, price action.

Nat-Gas UNG, Daily

First, it’s important to note the ‘Risk At A Low’, area.

That’s the location of this update.

With price action now at support, anything can happen.

There could be an immediate bounce, downside penetration, or some combination.

Note that Force Index (purple rectangle), shows action as ‘well behaved’.

That is, there’s no apparent craziness as was seen to the far left of the chart with wide swings in Force Index.

If UNG, does bounce higher from here, it increases the importance of the support level.

That, in turn, gives us a ‘heads up’; keep watching for a subsequent downside penetration and possible Wyckoff ‘spring’ set-up.

Stay Tuned

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

The Danger Point®, trade mark: No. 6,505,279