Natural gas has been forming a megaphone (blue on chart) since early 2012. NG has broken out downwards from that megaphone the past couple of days.
As that megaphone formed within a larger megaphone that goes back to 2009 (gray on chart below), it suggests that natural gas is heading down to the gray megaphone bottom (the target is around the lows of the early ’90s!).
But NG has also formed a shorter-term megaphone (pink on chart below) that suggests it may throw a kink into the collapse.
The breakout downward from the blue megaphone happened in the context of the pink megaphone forming across its bottom. Usually a downward breakout from a megaphone (pink) across the bottom of a larger megaphone (blue) would reverse pretty quickly for a move to the other side of the (pink) megaphone (purple scenario on chart).
I can’t guarantee that the price will reenter the pink megaphone, but if it does, it’s a set-up for a short-term long, and then we see.