Thursday, June 03, 2010

UNG Breaks Out On Heavy Volume


Talk about butchering a trade!  Here's a market I've been buying right near the lows but began to lose my patience with UNG so I liquidated just a few days ago. Well today UNG had an explosive rally on well above average volume making a 2 month high. As you can see, UNG broke out of a nice consolidation base.

It's one thing to analyze a market correctly which I did, but the way I traded this market was absolutely pathetic. I liquidated my position because of a bearish engulfment that developed the other day but was never confirmed. What I mean by confirmed is that the low of the bearish engulfment day was not taken out. In other words, there was no follow through to the downside after the bearish engulfment candle. What I should have done was simply raise my protective sell stop to just below the low of the engulfment day.

OK enough crying. I still think Natural Gas futures has a lot more potential to the upside but the only question that remains is will UNG rally with the futures or will this be another example of an ETF doing a poor job tracking its underlying futures market..

6 comments:

Anonymous said...

Kevin,

This was a great call. It's unfortunate that you couldn't capitalize on your analysis. The market is unpredictable and tries everyone's patience. I once had AAPL back at $16 pre-ipod and pre-iphone days. This was after MSFT announced that it would invest $100 million in AAPL. I bought at the high and got tired holding on because it never went anywhere. Gosh, I wish I could have kept my 1000 shares. I could be retired by now.

Well, anyways, you have done a great job with this blog. It's a must read everyday for me.

-traderwannabe

mingworld said...

Kevin,

That's for the post.
UNG weekly chart looks promising, but I think it will be good if we can see a lower high in the coming weeks.

Cheers,

Ming

Anonymous said...

i saw that breakout yesterday and was tempted to buy it, but decided to leave it alone. i dont trust that etf. i prefer to go with other stocks that i can trust and know how they behave.

thanks kevin! i follow u every post day.

dan.

Kevin said...

Kevin - you might try GAZ rather than UNG.

Michael T said...

Funny I posted a comment yesterday and don't see it on your other UNG post saying I didn't think it looked too bearish due to the Ichimoku chart cross over.
Sorry you didn't take a second look.

Kevin said...

I saw that comment and posted it...

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