Natural Gas coils under SMA 200. What’s next?

Aug 3

Natural Gas coils under SMA 200. What’s next?
Natural Gas is trading near $2.77, stuck inside a tightening range after recovering from the $2.68 support area.

The interesting part is that price is not falling anymore, but it is also not strong enough to break higher. Buyers keep defending dips, while sellers continue to appear near $2.80–2.82, where the SMA 200 and the upper side of the pattern are located.

The macro picture explains this compression.

Hot US weather supports short-term demand because higher temperatures increase power burn for cooling. Recent storage data also helped sentiment: the latest EIA build was smaller than expected, showing that demand is absorbing more supply than traders feared.
But the upside is still capped. Inventories remain above the five-year average, and high US production keeps the market comfortable.

This creates a simple setup: weather supports the market, but supply limits the breakout.
Technically, Natural Gas is trading around the EMA 9, EMA 20 and SMA 50, which confirms indecision. The real battle is near $2.80–2.82, where the SMA 200 and the upper side of the pattern are located.
If buyers reclaim this zone, the recovery can continue. If sellers defend it again, the market may stay under pressure.

Scenarios
🟢 Bullish scenario:
A clean H1 close above $2.82 would weaken bearish pressure and could open the way toward $2.90, then $2.98.

🔴 Bearish scenario:
A break below $2.72 would show that buyers are losing control. In this case, Natural Gas could retest $2.68.

⚪ Neutral scenario:
While price stays between $2.72 and $2.82, Natural Gas remains compressed with no confirmed direction.

For now, the key question is simple: $2.82 breakout or $2.72 breakdown?
⚠️ Not financial advice.

Aug 4

Trade active

Update:
Natural Gas is still compressed under the $2.80–2.82 resistance zone. The breakout has not been confirmed yet.

Price continues to move inside the pennant, while the SMA 200 remains the main barrier above. This means the original scenario is still active: buyers need a clean H1 close above $2.82 to confirm recovery toward $2.90.

If sellers defend this zone again and price breaks below $2.72, the bearish scenario would return, with $2.68 as the next support.

For now, the market remains neutral inside the range: $2.82 breakout or $2.72 breakdown.
⚠️ Not financial advice.

Aug 4

Note

Update:
Natural Gas broke below the pennant support, so the neutral compression phase is over for now.
The bullish breakout above $2.80–2.82 did not happen. Instead, sellers pushed price below the lower side of the pattern, confirming short-term weakness.

Now the key level is $2.72. If price stays below it, the next downside target is the $2.68 support area.

A recovery back above $2.76–2.78 would reduce bearish pressure, but the real invalidation for sellers remains a clean H1 close above $2.80–2.82.

For now, the bearish scenario is active.
⚠️ Not financial advice.

Aug 4

Trade closed: target reached

Natural Gas has now reached the main downside target at $2.68.

The bearish pennant breakdown worked clearly: price failed to reclaim the $2.80–2.82 resistance zone, broke below the lower side of the pattern, and accelerated toward the $2.68 support area.

Now the key question is whether sellers can break $2.68.

If price closes below $2.68 on H1, bearish pressure may continue toward $2.62–2.60.
If buyers defend $2.68, Natural Gas may rebound toward $2.72–2.74 before the next move.

For now, the bearish scenario has played out. I would not chase shorts directly into support — better to wait for either a confirmed breakdown or a pullback.
⚠️ Not financial advice.