The hourly candlestick chart of the ProShares Ultra Long Oil & Gas ETF (NYSE: DIG) shows the August rally period, which exhibits bullish form from the August 17 pivot low at 26.43 to the August 25 high at 31.60. After that rally, let’s notice that the pullback to 29.04 yesterday represents an almost exact 50% correction of the prior advance before yesterday afternoon’s initiation of a new upleg.

It is interesting to me that the August 17 low at 26.43 also represented an almost exact 50% correction of the July 8 to August 3 advance – which tells us that the bullish profile remains consistent within the development of a larger, year-long base pattern. Based on my pattern and momentum work, as long as yesterday’s low at 29.04 remains a viable corrective low, I will regard the action of the past 24 hours as the start of a new upleg that should climb to retest the August high (31.60) on the way to 33.50 thereafter.

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

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