Natural gas has been climbing steadily inside an ascending channel since mid-August, with the commodity recently breaking above the channel’s own upper boundary near the $2.980 region before stalling out.

This suggests buyers pushed a bit too far, too fast, and price is now easing back to gather more strength before attempting another leg higher. The pullback appears to be finding a floor around the 38.2% Fibonacci level at $2.889, with price currently hovering near $2.904.

If sellers manage to push through this area, the 50% Fib at $2.861 lines up closely with the channel’s mid-point and could act as the next magnet for buyers looking to jump back in. A deeper correction could stretch to the 61.8% Fib at $2.833, which sits just above the channel bottom and would likely be the line in the sand for the broader uptrend to remain intact.

On the moving average front, the 100 SMA has recently crossed above the 200 SMA, reflecting a shift in momentum in favor of the bulls. Price is holding above both averages for now, and this crossover could reinforce dynamic support on any pullback, keeping the path of least resistance pointed higher.

Stochastic has rolled over from the overbought zone and is heading south, with plenty of room left before reaching oversold territory. This indicates the correction could still have some legs before buyers step back in with conviction. RSI is telling a similar story, also retreating from elevated levels with room to fall further, hinting that sellers could remain in control in the near-term.

If the Fibonacci retracement levels are able to hold as support, natural gas could resume its climb toward the recent highs near $2.980 or higher. However, a break below the 61.8% Fib and channel bottom could open the door to a deeper slide, potentially invalidating the ascending channel altogether.