The correction has been more by time than price, as $SEA hasn’t pulled back much off the swing high:
Note the dry up in volume within the base, which is the result of traders exiting once the momentum is gone. The quiet volume is a sign that many have given up on $SEA, which is usually when a price correction comes to an end.
First Trust ISE Revere Natural Gas (NYSEARCA:FCG) has been in base-building mode since the last rally stalled in late October (around $20.50). After breaking down below the 50-day moving average in early December, $FCG made a run at the prior swing low from November 7 on Wednesday. The intraday selloff was quickly reversed, producing a bullish reversal candle by Wednesday’s close (the close was back above the the last swing low):
On Thursday, $FCG followed through on the prior day’s bullish reversal action with a decent rally that stopped just shy of the 20-day exponential moving average.
Going into today, we have added both $SEA and $FCG to our official watchlist for potential swing trade entry.
This article is brought to you courtesy of Morpheus Trading, LLC.
