A quick technical analysis for natural gas futures: Is a bearish breakdown imminent?

Update on Natgas technical analysis and trade idea (Trade did not trigger)

Price did not cross down, no trigger for short. Great run for the other side as upward channel is protected at the lower band. Previously on this post...

Technical uptrend shows natural gas has been ripping lately

For the past week, natural gas futures Futures Futures or a futures contract represents a legal agreement to buy or sell a security or asset at a predetermined price at a specified time in the future. Of note, the parties are not known to each other.These transactions usually involve commodities or other securities involving the buying and selling for a forward or predetermined price.Futures also adhere to a delivery date, which specifies the date of delivery and payment. Relative to other forms of investing futures are much more complex, as Futures or a futures contract represents a legal agreement to buy or sell a security or asset at a predetermined price at a specified time in the future. Of note, the parties are not known to each other.These transactions usually involve commodities or other securities involving the buying and selling for a forward or predetermined price.Futures also adhere to a delivery date, which specifies the date of delivery and payment. Relative to other forms of investing futures are much more complex, as Read this Term have been on a tear, climbing 35% in that time, and continuing to gain steam, currently up 32% after eight trading days. Even yet, an hourly technical analysis suggests we may be at the brink of a formation of a bearish trend.

In spite of the fact that the market is still moving upwards within a channel, a bear flag is forming and resistance is slanted in a negative direction. The bear flag's four upward pushes and subsequent plunge near the flag's bottom band suggest a bearish breakdown is possible, but others may disagree with this interpretation.

Betting on a breakdown of the bear flag and taking a short position is warranted due to the favorable reward-to-risk ratio. channels like the one shown in the 1 hour timframe in the NG technical analysis video, can be plotted on charts to help traders decide where to place trades. Keep in mind, though, that this is just a starting point; any trades made based on it will be done so at your own risk.

Those who want more evidence can wait for a probable breakdown, then wait for a retest, and then take the short position. If the retest is finished and the market starts moving down again, even to half way, the bearish trend is likely to continue.

If the bearish trend persists, traders can profit by locking in a profit just above the February 28 low, moving their stop loss down, and locking in another profit after a reward-to-risk ratio of 1.35. The most recent high can be used to set a stop order, giving the short roughly a 2:1 reward-to-risk ratio on the entire position. More aspiring traders can go for more than 6.5 reward vs. risk ratios as shown in the video.

All things considered, traders should keep a sharp eye on the market for signs of a bearish breakdown. As always, trade at your own risk and visit ForexLive.com technical analysis for additional views.