Natural gas continues to trend higher inside its rising channel on the 1-hour chart. Price bounced off the resistance and is testing the mid-channel area of interest.

The 100 SMA is above the 200 SMA to indicate that support is more likely to hold than to break. The 200 SMA also lines up with the middle of the channel to add to its strength as a floor. In that case, natural gas could soon recover to the channel top at $2.650.

Stochastic is still pointing down but dipping into the oversold region to signal exhaustion. Turning higher could mean that buyers are already taking over.

Meanwhile, RSI has some room to move lower, so sellers could have some energy left. This could be enough to take natural gas down to the channel bottom at $2.550 to gather more buying pressure. A break below support, however, could set off a reversal from the slide.

Natural gas has been mostly quiet for the past weeks as traders are adjusting to seasonal demand changes. Warmer temperatures could be setting in across several parts of the US, which would mean weaker purchases of the heating commodity.

Then again, risk-taking appears to be in play as traders focus on developments on the vaccination front and stimulus efforts. This could keep business and consumer activity supported while the economy starts to reopen and rebound from the impact of the pandemic, thereby boosting investor optimism and risk appetite.

The latest inventory report from the Department of Energy showed a surprise 14 Bcf build in stockpiles, which suggests weaker demand. Another increase in inventories would confirm that businesses are starting to prepare for warmer weather conditions as well, which could keep a lot of the commodity kept in stockpiles.