While crude oil prices rally strongly, natural gas gets hammered ahead of, and after the release of the latest inventory figures, which came in pretty much in line with expectations (a build of 74 bcf). Notwithstanding the inventory uptick, the U.S. Natural Gas ETF ( UNG) has declined right back to key support around 37.40/50. As of this moment (38.02), I am viewing all the action from the September 17 rally peak at 40.76 as a sideways digestion period (see light blue demarcation lines), prior to upside continuation that propels the UNG to the 43.00/50 vicinity.

Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com, a real-time diary of his technical chart analysis and trading alerts on all major markets. For more of Mike Paulenoff, sign up for a free 15-Day trial to his MPTrader Diary by clicking here.