Natural Gas Holds Trend Support as Range Compression Builds

Natural gas rose to a four-day high of $3.32 Tuesday and is set to close above the 20-day moving average again, keeping a key area of trend support intact. Until natural gas clears the lower swing high at $3.36, though, it stays pressured. A break above that level hits resistance running up to the trend high of $3.40, and a breakout past there reaches the 200-day moving average near $3.44 – last reclaimed in early February.

The near-term uptrend remains intact, which suggests further tests of resistance. A reclaim of the 200-day moving average would signal a change in character, one where buyers could turn more aggressive. A bullish reversal of structure would confirm the developing uptrend and mark a reversal from the prior downtrend, Jay said.

Otherwise consolidation continues. That could weaken into a test of support near the recent higher swing low of $3.02. The 50-day moving average, now near $3.05, has risen above that low and takes precedence as dynamic support. So if the area near $3.12 breaks, the 50-day line becomes the next target.

The biggest development is the range compression itself. The current weekly pattern shows a double inside week – this week's range fits inside last week's, and last week's fits inside the one before it. Range compression often precedes range expansion and momentum moves. So while volatility is low right now, that could change soon.

LNG fears and hot weather are supporting prices in the near term. LNG stock page traders are watching whether production disruptions from recent Gulf storms tighten supply enough to push futures through $3.40.