NEW YORK ( TheGoldAndOilGuy.com) -- The United States Natural Gas Fund (UNG) recently caught my attention. While it was in a significant downtrend for the better part of a year, it has recently been consolidating right under the $20 level.
A look at the daily chart shows a long move down and then, recently, a sideways consolidation pattern. While this is typically a continuation pattern, I am beginning to think that the next move may be up, rather than an extension of the previous downtrend.
If we zoom in a bit and take a look at the hourly chart, we are presented with two scenarios
- The rising wedge holds and UNG breaks through the $20 to $20.50 resistance level on high volume and a new long-term up trend is produced.
- The head and shoulders pattern within the wedge breaks downward and the downtrend resumes.