The upmove in the S&P 500 has been natural resource and basic materials related, and natural gas should be a beneficiary.

My near- and intermediate-term pattern and momentum work argue strongly that the US Natural Gas Fund ETF (UNG) is in the midst of a significant recovery rally period that has as its optimal target zone 6.20/40 and its "outlier" target zone 6.75-6.90.

At this juncture, only a resumption of weakness that takes out the lows at 5.40, 5.27 and 5.20 will wreck the current, constructive technical setup.

 

Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com.