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UNG Building a Price Bottom

The United States Natural Gas Fund (UNG) has been consolidating since reaching a low of 5.79 in March. As we can see in the 4H chart, price has rallied above 7.00 in April but retreated last week. 

UNG 4H Chart 5/2

(click to enlarge)

Note that price has broken above a key support/resistance pivot area around 7.00 and the current dip could be a test of that previous consolidation as support. A break below 6.50 would reflect a failure of the bull market to establish a price bottom and open up 6.00 and the 5.80 low. 

So far, price is holding above 6.50, and above the 100-, and 50-period simple moving averages, which is a bullish bias. Also, the fact that the 4H RSI has held above 40 after it tagged 70 shows maintenance of the bullish momentum in this price bottom attempt since March. If the bullish momentum extends, then we can see a push towards the 8.00 pivot, and the 8.50 pivot established in February and January.