UNG breaks back below 20-day moving average
United States Natural Gas (UNG) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, UNG ended the month unchanged at 10.26 after losing $0.16 (-1.54%) today on low volume. Closing below Thursday's low at 10.36, the ETF confirmed its breakout through the prior session low after trading up to $0.21 below it intraday.
Daily Candlestick Chart (UNG as at Jul 31, 2020):
Friday's trading range has been $0.34 (3.26%), that's slightly below the last trading month's daily average range of $0.39. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for UNG.
Prices are trading close to the key technical support level at 10.06 (S1). The market closed back below the 20-day moving average at 10.34. When this moving average was crossed below the last time on Monday, UNG actually gained 4.33% on the following trading day.
While UNG is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Selling might speed up should prices move below the nearby swing low at 10.07 where further sell stops could get activated.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Break through SMA 20" stand out. Its common bearish interpretation has been confirmed for UNG. Out of 140 times, UNG closed lower 53.57% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 57.14% with an average market move of -1.00%.