In sympathy with today’s upmove in crude oil, natural gas prices have lifted, too, off of their extremely oversold condition, which also has lifted the U.S. Natural Gas Fund ETF (NYSE: UNG) from yesterday’s Double Bottom low at 12.69 above key near-term resistance at 13.80. Whether or not today’s up-spike is the beginning of a sustainable recovery phase remains to be seen.

One thing is for certain: the oversold condition supports a recovery rally to 15.50 at a minimum from current levels; however, I have seen firsthand that more than an extreme oversold condition is required to sustain an upmove in the UNG. I will watch from the sidelines for a while longer to see if today’s upmove holds, or if the micro pattern carved-out from 12.69 exhibits bullish form, either of which will compel me to re-enter the long side.

By Mike Paulenoff

Mike Paulenoff is author of the MPTrader.com (www.mptrader.com) , a real-time diary of Mike Paulenoff's trading ideas and technical chart analysis of

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