As we noted in Friday’s Bespoke Report, the US Natural Gas Fund (UNG) was the top-performing ETF in our asset class performance matrix last week with a 9.16% gain. That move higher is continuing today as UNG has rallied another 3.5% to its highest level since May after breaking above resistance (which also was previous support) around $21. All of this comes after the ETF made an all-time low on August 5th when it opened at $17.75. Since that open, UNG has surged 25.86%.
Following a volatile spike at the end of last year, UNG collapsed below its 50-DMA. Up until the end of August, this acted as stiff resistance for the commodity, but this most recent leg higher has sent UNG surging through these levels. UNG now sits over 10% above its 50-DMA and is moving deeper and deeper into extremely overbought territory (over 2 standard deviations above its 50-day). As precious metals have begun to experience a bit of mean reversion, UNG has become by far the most overbought commodity ETF in our Trend Analyzer. Start a two-week free trial to Bespoke Institutional to access our interactive economic indicators monitor and much more.