Twitter Ticker ($UNG)

• Charles Amadeus
• September 10th, 2009

Natural Gas is catching fire on StockTwits as $UNG rises +10% in Thursday’s trading. After plummeting 40% during August/September (8/9), $UNG is enjoying a sharp reversal of fortune, much to the relief of the knife catching bulls who contemplate valuation.

Although $UNG is trading in a primary downtrend, it has initiated a secondary uptrend that will hold if it trades above 9.87. If you believe in a reflation/inventory/Obama thesis (or some other theory), have an escape plan and don’t average down.

Judging by the horizontal volume by price, a move back to the $14.15 range may be in the works. A deluge of unhappy bears covering their shorts could overwhelm the underwater bulls who sell to break even as $UNG gains momentum.

$UNG remains a high risk trade due to the massive technical damage. Nevertheless, a quantifiable level of risk has presented itself, so those who wish to take a chance picking the bottom have a place to start.