Natgas: $2.87 resistance test , 3 scenarios to watch

There is no doubt that the US Natural Gas is at the panic selling phase. With the current price at $2.72, the market price seems to be testing its lower end of the normal seasonal range. This is due to the persistent decline in the low-volume season where any anxiety about international supply does not seem to matter.

On the technical end, the $2.74 area is a vital point for the bulls. The market is trapped in a descending channel with the 50-day EMA being a barrier that has capped every recovery attempt since early in March. The RSI is reading at 50.49. After having resisted at the 50-mark, the indicator signals that the asset still needs to drop by another 6-10 points before reaching the zone of deep oversold levels..

Trade recommendation :

Direction: Short
Entry Zone: $2.72 – $2.95 .
Target: $2.45
Stop Loss: $3.12.


Technical Scenarios:

Bearish:
Trigger: A clean break and daily close below $2.45.
Potential Outcome: Acceleration toward $2.15 as technical stops are triggered.

Mean Reversion:
Trigger: RSI drops below 30.
Potential Outcome: A tactical short squeeze rally toward $3.10 to retest the 50-day EMA.

Sideways Consolidation:
Trigger: Price remains trapped between $2.50 and $2.95.
Potential Outcome: Choppy trading as the market digests the current storage overhang.