Even if natural gas has finally put in a good low, which is far from a sure thing still, as I have been discussing for a while now you can expect lots of violent backing and filling. The bottoming process can be a tedious one, full of heart-breaking shakeouts even if price makes higher lows.
As you can see on the UNG daily chart below, the rally of late has been sharp and enticed plenty of traders into playing the big bottom. Today’s high volume fade may signal a few shakeout days are coming. However, I would not be surprised to see a rally all the way up to the declining 200 day moving average. Even then, UNG might not have bottomed, and that reference point is going to be declining for a while longer, which means remaining extremely disciplined with natty longs is critical.
One Response to Expect Violent Last Gasps from the Bear
I think it’s bottomed, but I’d only buy on nice pullbacks. My reasoning? Have you heard or read anywhere lately that they would be PAYING us to take the natural gas off of their hands. That was THE bottom. Now it’s just a matter of trading. Buy some. Sell some. Rinse. Repeat.