UNG breaks below Tuesday's low
United States Natural Gas (UNG) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
UNG finished Wednesday at 12.14 losing $0.43 (-3.42%). The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 12.48, the ETF confirmed its breakout through the prior session low after trading up to $0.42 below it intraday.
Daily Candlestick Chart (UNG as at Sep 16, 2020):
Wednesday's trading range has been $0.45 (3.6%), that's slightly below the last trading month's daily average range of $0.53. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for UNG.
Two candlestick patterns are matching today's price action, the Bullish Hikkake Pattern which is known as bullish pattern and one bearish pattern, the Black Candle. The last time a Black Candle showed up on September 11th, UNG actually gained 2.65% on the following trading day.
After trading as low as 12.06 during the day, the market found support at the 50-day moving average at 12.07.
UNG shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Selling could speed up should prices move below the close-by swing low at 12.06 where further sell stops might get triggered. Further selling could move prices lower should the market test August's nearby low at 11.28.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Bounce off SMA 50" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for UNG. Out of 31 times, UNG closed lower 67.74% 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 58.06% with an average market move of -1.60%.