The DUG (UltraShort Oil & Gas, ETF), my hedge postion against a nasty but well overdue correction in the energy names and indices, is beginning to climb. Let's take a look.

After two weeks of sideways trading between 47.00 and 43.00, today's strength suggests that the DUG has completed a base-like pattern in the aftermath of its vicious correction from the January 23 high at 54.64 to the 42.62 low on 1/30. However, completing a base is still one significant step from transcending a new upleg. The DUG must hurdle and sustain above 47.10/20 to trigger upside acceleration towards a retest of the January high.



Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com, a real-time diary of his technical chart analysis and trading alerts on all major markets. For more of Mike Paulenoff, sign up for a free 15-Day trial to his MPTrader Diary by clicking here.