He Who Denied it, Supplied It

The seemingly endless downtrend in natural gas is taking a respite this morning, with UNG up nearly 7% as I write this. As we know, bear markets often feature some of the most violent counter-trend rallies, as latecomer shorts get caught leaning when then should likely have been covering up for discipline, on top of the usual suspects chasing what they believe to be a meaningful bottom higher. Usually, the rallies fail abruptly, adding even more volatility to a bear trend. 

In the present case, perhaps the "mild wintry weather" theme became a bit too ubiquitous, coupled with natty's nightly plunge in the futures market. Hence, a counter-trend could easily be in the cards. 

At issue, of course, is the sustainability (and tradability) of the move. 

On the 30-minute chart for UNG, the natural gas ETF, below, note how price blew up through the initial $7.20 resistance and is now contending at the $7.45 area, which would unlock a gap-fill higher to $7.72. I am looking to see if natty can base out on the timeframe before assaulting that gap above, for an entry. 

Whether or not this is a major bottom is anyone's guess--We would need to see much more technical evidence to even consider it. 

But for now those are denied the possibility of a rally in natural gas may be supplying the fuel for a bit more upside fire.