Natural gas recently fell through support at the $3.000 major psychological level then dipped to a low of $2.784. Price might be in for a pullback to the former support before resuming its slide.

Applying the Fibonacci retracement tool on the latest swing high and low shows that the 38.2% level lines up with this area of interest. A larger pullback could last until the 50% Fib at $3.058 or the 61.8% level at $3.123.

The 100 SMA is still above the 200 SMA, though, so the path of least resistance is to the upside. In other words, there’s still a chance that the uptrend could resume, especially since the gap between the moving averages is not narrowing. Price also found support at the 200 SMA dynamic inflection point, which might continue to keep losses in check.

Stochastic made it to the overbought zone to signal exhaustion among buyers, and turning lower could confirm that sellers are about to return. RSI, on the other hand, is on the move up and has space to climb before indicating overbought conditions, so buyers might still have some energy left for a higher pullback.

If any of the Fib levels hold as resistance, a selloff back to the swing low could form a head and shoulders pattern. A break below the neckline at $2.800 could set off an even longer-term slide.

Natural gas is on weak footing as traders aren’t expecting a large draw in stockpiles from the upcoming inventory report. Recall that supply has been limited due to the temporary shutdowns due to the winter storms, so any large reductions might be considered a one-off event.

Meanwhile, demand has also been dampened to warmer temperatures in the past few days, along with the inability of some producers to ship their output due to the weather disruptions.