Boston, MA 07/10/2013 (wallstreetpr) – United States Natural Gas Fund, LP (NYSEARCA:UNG) shares closed at $19.41, down by 1.62%. This is somewhat midway of its 52-week price range of $17.38 – $24.09.
This has been after the shares broke down below the 200-day moving average for a few days, after which it has now rallied off the lows and closed above the 200-day MA yesterday. If it manages to hold the current position of being above the 200-day moving average, it will reflect a bullish double bottom pattern. If this happens, the first higher swing low which was recorded at or above $21 could provide a low entry risk point for partial size to its investors.
Traditionally, in a conventional double bottom, both lows tend to be equal. However, it is to be noticed that investors should pick that trade which reflects stock/ETF to undercut the prior swing low and then reverses higher. This is necessary as the required prior swinging low generally scares away the most longs and triggers a ton of sell stops.
Now, this pattern is possible with the price action recovering quickly above the prior swing low, i.e. $21. However, if shares of UNG stays below $21 for too long time, then it will no longer be considered a shakeout. It will then be an ETF which is simply making lower highs and lower lows (a downtrend).
Also, June has been a rough month for commodity investors across the board. A strong dollar clubbed with reports of Fed easing helped to dull the natural resources demand, pushing commodity ETFs to report a fall in price. The natural gas segment suffered not only because of broad market factors, but also for reasons specific to the particular industry.
However, as compare to UNG, its rival Unites States 12 Month Natural Gas ETF (NYSEARCA:UNL) loss a little less then UNG, but still plummeted by 14.8%.
