Natural gas is treading water inside an ascending channel that has been guiding price higher since early August, with the pair recently bouncing off the mid-channel area of interest near $2.730 to resume its climb.

The commodity is now hovering around $2.786 after pulling back from a swing high near the channel top around $2.900, and the Fibonacci extension tool highlights where buyers could be aiming to take the rally next.

The 38.2% level lines up with the $2.823 mark, while the 50% extension sits at $2.851, close to the swing high. A larger climb could reach the 61.8% Fib at $2.880 or even the 76.4% level at $2.915, which would still keep the broader uptrend intact.

Stronger bullish momentum could allow natural gas to extend its ascent toward the channel top and the 100% extension around $2.972, or possibly higher if upside pressure accelerates. A break back below the mid-channel bounce zone, on the other hand, could open the door for a retest of the channel bottom.

On the moving average front, the 100 SMA has been converging with the 200 SMA and appears to be crossing above it, hinting that the path of least resistance could be shifting to the upside as the shorter-term average catches up with price action.

Stochastic is hovering near the overbought region after a strong push higher, reflecting robust buying pressure, though a turn lower from these levels could spark another round of profit-taking. RSI, meanwhile, still has some headroom before reaching overbought territory, suggesting that bulls may have a bit more gas left in the tank before exhaustion sets in.

Overall, as long as natural gas continues to respect the ascending channel and mid-channel support, the broader bias favors a resumption of the rally toward the upper Fibonacci levels and beyond. Natural gas appears to be finding support from rising demand for cooling commodities as heat waves are being reported.