Late July UNG (United States Natural Gas Fund, $18.59 – up $0.01) slammed into some healthy resistance at the 22.59-77 area that was a bit more obvious on the weekly chart. We’ve seen a healthy decline since then. Now although it is possible that the decline from the 7/31 high continues, I have to point out an interim decision here where UNG may find support. It comes in with a Fibonacci price cluster zone that comes in between the 17.37-18.34 area.
The way to look at this is IF I was short, I would want to tighten up stops, just in case a buy trigger against this support fires off. If I was flat, I would patiently wait for a buy trigger and define my risk below the 17.37 area.
Note that a hold above this zone would eventually target the 23.52 area. A violation of this same key zone would vote for a continued decline towards the 1.272 extension at 12.03.
Bottom line, UNG is at an important crossroads. Let’s see what the market does around this key decision and trade accordingly.