Natural gas exchange traded funds experienced a dramatic turnaround Thursday following weekly supply data. The rally at a key support level had technical analysts wondering if the commodity ETFs have put in a short-term bottom.
United States Natural Gas Fund (NYSEArca: UNG) declined 2% in early Thursday trading but snapped back after touching its 52-week low. UNG ended the session with a nearly 2% gain. The fund invests in natural gas futures.
Jonathan Krinsky, a technical analyst at Miller Tabak, believes natural gas rebounded due to technical indicators, MarketWatch reports.
“The continuous contract […] came close to the February lows around $3.135, and has hit the downtrend support line,” Krinsky said in the MarketWatch article. “Therefore, we would not be surprised to see a bounce from this area.”
Earlier in the day, natural gas futures dipped after the U.S. Energy Information Administration revealed that natural gas storage in the U.S. in the week ended Aug. 2 increased 96 billion cubic feet, compared to market expectations of a 77 bcf rise, Investing reports.