Earlier this year, Nat Gas broke out of a 2-year consolidation pattern to reach a price point not seen since 2011. The Nat. Gas ETF UNG chart is shown below, and we can see a nice level of volume indicating significant participation in this sector on the breakout. By late June, however, the party ended. Investors were belching out their positions in the sector, and Nat Gas fell back into the top end of its former trading range.
This failure is interesting, because normally a breakout such as we’ve seen is indicative of good times to come. This kind of breakdown can cramp ones faith in high-volume breakouts – but it happens.
At this point, the UNG gas ETF is trading in a range between $20-$22.50. A breakout on either side that lasts for a few days would lead direction to its next move. Until that point, I’d avoid this commodity.
Keith at MoneyShow Tomorrow
Toronto MoneyShow: Metro Convention Ctr. Thursday October 16, 2014. 3:30PM. I’ll be giving a special presentation entitled The Great Rotation on Thursday October 16th at 3:30pm
I will reveal how to identify 2015’s market outperforming stocks, along with tips on avoiding the losing stocks and sectors.