UNG Breaking Higher?

Published on Sunday, 16 May 2010 23:44 Written by Christian Paolinetti

 New York, May 16^th (TradersHuddle.com) – Shares of the United States Natural Gas Fund (NYSE: UNG) closed the Friday session at $7.51, fractionally lower on a very tight range, as it is dealing with the resistance at the downtrend defined by the 50 day moving average.

The UNG has been able to base for the last month or so, with a range between $6.50 and $7.50, therefore a breakout above the 50 day moving average could put the UNG on breakout territory, and probably sparking a good momentum move.

The June $8 call was purchased over 10,000 times last Friday; open interest on the strike is over 70,000 contracts, therefore definitely bullish bets are being made on the UNG.

The UNITED STATES NATURAL GAS FUND seeks to replicate the performance, net of expenses, of natural gas. The trust will invest in futures contracts on natural gas traded on the NYMEX that is the near month contract to expire. It is non-diversified.