UNG has dropped from January 16th and from the next pop up in early March which is consistent with the forecast for lower from a wave iv bounce. Both weekly and daily cycles suggest an inflection point is near but price is not as deep as I’d like it. Since we now have prices back into the range UNG was in for much of 2018, I’m not confident in much lower prices but neither can I say lower is impossible. Disclosure, Natural Gas is my kryptonite, it is the market I have the most difficult time with, so take this accordingly, but I think we are in an area where a long trader can begin to accumulate.
Back when I last updated UNG charts, I thought a bounce was due and in fact one has taken place. The question now is, was the low in February the end of the pattern down from the November high from last year or is there one more low left? I favor the latter because fourth waves typically have a complex wave form and we have yet to a new low or test of the 2017 low. For timing, thinking the best time for a low is late March or early April, even it turns out to be a higher low.
It might be making a durable low
When I last posted a UNG chart about two weeks ago, my assumption was that a wave iv bounce was forming against 30.08. As it turns out, that resist was not challenged again and prices have continued to fall. That said, I think it might be jumping the gun to say that UNG is now down in ‘v of (iv)’ though that is the alternate. The primary I am running with is that this drop is ‘[B] of iv’ and due soon for a move up in ‘[C] of iv’. Targets for iv are at 26.71 and 29.13. As for timing, beginning to mid April looks appealing for the ‘v of (v)’ low. Weekly and daily charts below.
Watch for a countertrend swing
The ETF dropped when it reached the right altitude
The last high was probably an overshoot
It should cut into the year-long advance
I was working on the ETF that tracks crude oil, (USO), and have decided to promote what I had as an alternate count in crude to the primary, that there is one more high needed to complete a five wave sequence up from the low from last year.
The primary hypothesis in Crude is that the 2017 low was a truncated low and that we are now seeing the first move up out of that low. The next move should be a corrective move lower that last at least until May if not continue into October.