As we discussed late yesterday, all of the action in the ProShares UltraLong Oil & Gas ETF (NYSE: DIG) off of the March 26 high at 25.49 looks like a consolidation-digestion area ahead of another run on the upside to complete an intermediate-term recovery period that began during the first week of March. This morning’s decline to a marginal new pullback low at 21.78 (off of the April 3 high at 25.29) did not follow-through to the downside. Instead, the price structure pivoted to the upside and has climbed into positive territory in what looks like the start of an upward traverse of the 22- to 25-month-long trading range. If such a move indeed unfolds, I will be expecting a run at the 24.25 level next. A climb above 25.30 is needed to trigger much more powerful buy signals. Conversely, a decline that breaks today’s low at 21.78 will be technically negative, and will point prices towards a test of the prior low at 20.50.
