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Fan Yang

United States Natural Gas Fund (UNG) Bullish Breakout vs. Bearish Trend

United States Natural Gas Fund $UNG has been recovering since August after a year-long bearish trend. Share price came close to $40 in November 2018 before falling to $18 by August. Then we saw an interesting rebound.

UNG Daily Chart

(click to enlarge)

Bullish Reversal?
- As we can see on the daily chart, price has been bearish until finding support at $18.
- Since then price rallied above a falling resistance and pushed the RSI above 70. Most importantly, price broke aovve the July high around $21.50.
- These could be early signs of a bullish reversal, but could be too early.
- Price retreated when UNG hit the 200-day simple moving average (SMA). 
- On the weekly chart below, we can see that UNG is still bearish.
- I think the $20 area will be key along with the daily RSI around 40. 
- If price can hold above $20 and the RSI can hold above 40, I would gain confidence about the bullish outlook. 
- If price does get into a bullish reversal mode, I would still limit the bullish outlook because the prevailing trend is very bearish. I would anticipate resistance if price pulls into the $27-$30 area. 

UNG Weekly Chart

(click to enlarge)

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