After months of falling Gasoline prices, February saw a bounce higher in the Gasoline ETF (UGA). And it has been a big one. I wrote about gasoline’s biggest 3 day rally in early February and how the power of the pattern continued to suggest higher prices… and a rally for the Gasoline ETF. The pattern showed Gasoline was bouncing off a major long-term channel support.
Well, it’s now the end of February and, with Apple (AAPL) up over 10 percent and the S&P 500 (SPY) on pace for its best “February” since 1998 (up nearly 6 percent), it seems crazy to think that Gasoline prices not only up, but up big: spot gasoline prices are higher by 17.4 percent in February. Apparently, the consumer doesn’t mind… yet.
This week also saw a breakout above Gasoline’s near-term downtrend line and 23.6% fibonacci retracement level. And this could be signaling even higher gasoline prices into March.
Gasoline ETF (UGA) Price Chart
Below is a chart showing the performance of the Gasoline ETF over the past month vs The S&P 500 and Apple (AAPL):
Keep this one on your radar. Not only because it’s been a good swing trading setup but because higher gasoline prices could “ding” the consumer heading into driving season… But the cold weather reminds us that summer is still a ways off. Have a great weekend and thanks for reading.
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Author may have positions in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.