The lower-than-expected build in natural-gas inventories (28 bcf vs. expected 37 bcf) in Thursday's weekly storage report goosed the price of the natural-gas futures.
The positive juxtaposition of our nearer-term momentum gauges with the sideways price action on the natural-gas. chart (July contract) was one of the indicators we used, which you can see on the chart below from August 8.
We actually added a long trade in UGAZ back on August 2, when the futures clawed their way above important resistance at 2.835, which corresponded to a price of 11.07 in UGAZ.
As we now know, natural gas rocketed on Thursday above the July 31 unfilled down-gap area at 2.89-2.92, toward a challenge of the next significant resistance zone at 2.97-3.00.
If hurdled and sustained, this will trigger the potential for a run at multi-month resistance at 3.10-3.11.
UGAZ has already exceeded our initial target of 12.40 and is up over 15% since we added it. Our next target is 13.25.
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