Natural gas has bounced off the descending trend line resistance on the short-term time frame, as price is now hovering around the $2.600 level. This bounce signals that the downtrend is gaining traction, despite an earlier brief fakeout, opening the door to deeper losses ahead.

The Fibonacci extension tool highlights the key bearish targets where sellers could be looking to cash in gains. The 38.2% extension is at $2.559, followed by the 50% level at $2.492.

A steeper decline could reach the 61.8% Fib at $2.425, with the 76.4% extension at $2.341 and the full measured move target at $2.207 likely acting as the ultimate floor for the selloff.

On the moving averages front, the 100 SMA remains below the 200 SMA to confirm that the path of least resistance is to the downside or that the selloff is more likely to gain traction from here. Price is also trading below both indicators, so these could hold as dynamic resistance on any rebound attempts.

Stochastic is pointing sharply lower from near the overbought zone, reflecting strong bearish momentum taking over. The oscillator has plenty of room to slide before reaching the oversold area, suggesting the correction could keep going while sellers press their advantage.

RSI has also turned decisively lower and is approaching the oversold zone, though it still has ground to cover, meaning price could keep following suit while sellers remain in control.

From a fundamental standpoint, rising temperatures heading into spring typically weigh on heating demand, which could add further pressure on natural gas prices if upcoming inventory data reveals a significant build in stockpiles.

The latest inventory report revealed a larger than expected build of 103 Bcf versus the projected 96 Bcf increase and earlier 59 Bcf gain, confirming that demand is starting to fade while temperatures cool down.