Volume Fueled Move Could Provide A Buying Opportunity In The U.S. Natural Gas ETF (NYSEARCA:UNG)
Stocks continued their upward surge on Friday, on strong trade. All five major indices closed more than two percent higher. High beta issues led the charge with the Nasdaq, small-cap Russell 2000 and S&P MidCap 400 posting gains of 3.0%, 2.9% and 2.8% respectively. The S&P 500 tacked on 2.5% while the Dow Jones Industrial Average improved by 2.2%.
Market internals ended the session mixed. Volume plunged on the NYSE by almost 30.0% but dropped only 5.0% on the Nasdaq. Advancing volume outpaced declining volume by a ratio of 1.8 to 1 on the NYSE and by a ratio of 2.0 to 1 on the Nasdaq. The light volume suggests that institutions were not actively buying or selling on yesterday.
On June the 28th, the United States Natural Gas Fund (NYSEARCA:UNG) formed a bullish reversal candle, as it undercut its 10-day moving average before rallying to close near session highs. For the past two days, UNG has been consolidating along its 10-day MA, as it has attempted to get back above resistance near $19.50. A volume fueled move above the three day high of $19.47 could provide a buying opportunity in UNG. We are placing UNG on the watchlist. Trade details are posted for our subscribers in the watchlist section of the newsletter.
As might be expected, the market consolidated yesterday, following two days of very bullish price action. We wouldn’t be surprised to see another day or two of hesitation, prior to the market resuming any potential move higher.