Oil & Gas Technical Update

Natural Gas (UNG) may have the most bullish looking chart among all the commodities.

The market bottomed in 2009 and has spent much of 2010 trending down, though holding above the 2009 bottom. The downtrend has resulted in a typically bullish descending wedge pattern. The market has held support at $3.50 four times in the last few months. Now it is challenging a confluence of resistance at $4.50. A break of $4.50 and the next target is $6.00.

Meanwhile, Oil (USO) rebounded 3.6% from support at $80. Note the lateral support as well as the moving average support just beneath $80. Some consolidation from $80-$90 would setup a potential cup and handle pattern, which would be very bullish for Oil.

Recently we’ve noted that public opinion for both markets is less than 50% bulls. It is likely that the “hot money” has flown into emerging markets, Silver (SLV) and other areas though not including Oil and Gas.

In our new Commodities Premium service we’ve been scanning for opportunities in energy and have found some. There are more than a few junior oil and gas companies that look very intriguing and we will be covering them in our next issue. Consider taking a free 14-day trial to our service.

Good Luck!

Jordan Roy-Byrne, CMT

Jordan@TheDailyCommodities.com