While crude oil prices rally strongly, natural gas gets hammered ahead of, and after the release of the latest inventory figures, which came in pretty much in line with expectations (a build of 74 bcf).

Notwithstanding the inventory uptick, the U.S. Natural Gas ETF (AMEX: UNG) has declined right back to key support around 37.40/50. As of this moment (38.02), I am viewing all the action from the 9/17 rally peak at 40.76 as a sideways digestion period (see light blue demarcation lines), prior to upside continuation that propels the UNG to the 43.00/50 vicinity.

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 Exchange Traded Funds (ETFs) that track equity indices, metals, energy commodities, currencies, Treasuries, and other markets. It is for traders with a 3-30 day time horizon, who use the service for guidance on both specific trades as well as general market direction

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