In this August 23 blog post, we said iShares Dow Jones US Real Estate ($IYR) was an ETF we were monitoring for potential short selling entry in the coming days/weeks.

The ETF has remained on our short selling watchlist since then, as we have been waiting for a low-risk short entry point near resistance of the 50-day moving average. Now, it seems as though that entry point may soon develop. Take a look at the daily chart below:



In addition to moving average resistance, the 61.8% Fibonacci retracement level, around the $66 level, should also provide resistance.

Note that we are definitely in no rush to sell short right now, but it never hurts to have a list of potential short candidates ready to go in the event of a swift market reversal.

After a false breakout to new highs on the weekly chart in April, United States Natural Gas Fund ($UNG) sold off for 15 weeks before subsequently forming a false breakdown below the prior lows in July.

The false breakout action on both sides of the market has undoubtedly frustrated many ETF traders, many of whom have given up on the trade. As such, there should now be less overhead supply, which means the next breakout could be the one that works.

Currently, $UNG is sitting on top of its 10-week moving average (which is beginning to flatten out) after breaking the downtrend line. However, $UNG still has a ton of work to do to technically, as the 10-week moving average has yet to trend higher and is still well below the 40-week moving average:



Our existing long position in First Trust ISE Revere Natural Gas ($FCG), which we recently bought in our swing trade newsletter continues to act well. The ETF has rallied 3% so far this week, with volume picking up as well.

$FCG may run into a bit of resistance around the $18.70 area, but the current breakout from a six-month long base should generate enough momentum to push the price action to the next big resistance level on the monthly chart (around $20).

Deron Wagner is the Founder and Head Trader of both Morpheus Capital LP, a U.S. hedge fund, and MorpheusTrading.com, a trader education firm.