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

<p>Technical uptrend shows natural gas has been ripping lately </p><p>For the past week, natural gas futures 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.</p><p>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 <a target=“_blank“ href=“https://www.forexlive.com/technical-analysis“>ForexLive.com technical analysis</a> for additional views.</p>

This article was written by Itai Levitan at www.forexlive.com.

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