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Natural Gas ETF ‘UNG’ Hits Buy Signal on 3 Timeframes

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With December 2014’s closing price, UNG completed a Monthly ‘Aggressive Sequential’ Buy signal, as mentioned in my January 4th Article.

This week, UNG is completing Weekly and Daily Buy signals.

Weekly ‘Setup’ Buy in process of completing this week:
Demark, Sequential, UNG

 

Daily ‘Aggressive Sequential’ Buy completed yesterday in coordination with Weekly signal (cell AE1411).

UNG, Demark, Sequential

I believe the downtrend in UNG (and thus Natural gas) price is very nearly over. The winter storm that was supposed to cripple the Northeast did not materialize, and natural gas responded with what I think is its last panic price fall down. The downtrend has been exhausted on 3 timeframes, it appears we’re reaching the point where ‘there’s no one left to sell’. Short interest fell 29% last month as shorts are taking their profits.

Rather than purchase the UNG etf, I’m looking into energy MLP’s which will benefit from higher natural gas prices.

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The Natural Gas ETF ‘UNG’ Presents an ‘Aggressive Sequential’Buy Signal

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I haven’t written much lately about my Trend Exhaustion system, which follows the well-known Tom Demark indicators such as ‘Sequential’ and ‘Combo’.  With the end of December, the natural gas ETF ‘UNG’ has signaled an ‘Aggressive Sequential’ buy.

UNG has been one of the worst performing commodity ETF’s, falling from its 2007 IPO price of $400 to currently $14.96.  UNG reached the ‘Setup’ phase in 2012, and I’ve been waiting since then for either ‘Combo’ or ‘Sequential’ to trigger.  As this is measured on a monthly basis, this presents a long-term buying opportunity.

UNG ‘Aggressive Sequential’ Buy Signal December 2014UNG, natural gas, trend exhaustion, demark sequential

These indicators (Sequential and Combo) identify turning  points across the stock, bond, commodity and currency markets.  They are intended to signal the end of a trend, and the start of a new trend in the opposite direction.   ‘Aggressive’ versions of these indicators can be early, so it wouldn’t surprise me if UNG has continued weakness for several more months.

But sub-$3 natural gas does not appear to be sustainable in the long term:  U.S. Natural Gas Economics: $4 Works; $3 Is Too Low

The UNG ETF itself is not my preferred natural gas play.  The ETF has been well criticized for performing even worse than the commodity it is supposed to track.  So I’m looking into beaten-down natural gas stocks.  Also coal, which has long-suffered due to natural gas competition, could benefit from higher gas prices.
/This Trend Exhaustion spreadsheet is available from the Research Offers page.