Natural Gas Bearish Setup

Alexandros Yfantis • Jun 7, 2018 at 11:47 PM EDT

NG, still inside a long-term bearish channel, is now trading near the upper channel boundary. This is a great shorting opportunity with tight stops above $3.

NG, still inside a long-term bearish channel, is now trading near the upper channel boundary. This is a great shorting opportunity with tight stops above $3. If history repeats itslelf like the past two times NG was trading at the upper channel boundary, we should soon expect the start of a sell off towards $2.60 and lower.

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Taking a closer look to recent price behavior I think of two possible ways to trade this. Sell on a break of the sideways range ($2.86 support) or sell now at $2.93 with the highs as stops for both cases. Price made a new short-term higher high today but the RSI did not follow. This is a non-confirmed high and we can see more selling pressures arrive here soon. Price already is trading $0.06 lower than the high at noon.

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A break below $2.86 will open the way for a move to $2.77-2.72 very fast. I’m bearish NG expecting a sell off soon.

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