June 8, 2009 - Trends in DIG (Ultra OIL and Gas)

I was looking at DIG over the weekend and noticed very distinct technical patterns in the daily chart. Let's take a look at the chart:



On the left side a very obvious head and shoulders pattern is visible. A horizontal line has been drawn to indicate the relative top of this pattern to mark a resistance line for the uptrend forming at the right side of the chart.

Even though the trend has formed a nice channel to the upside, I wonder if it will continue to climb. Here the resistance line at around $32 will serve as a very important mark.

At the bottom of the chart, the MACD traces a bearish pattern - it has formed a higher "hump" at the May 11th top compared to the lower one formed around June 2nd. RSI is not indicating over-bought levels, although it has been above the center line for more than a month.

I own DIG in my portfolio and will look to close the position for profits at these levels if I see signs that resistance will drive the price lower.