Natural gas found support at the broken range resistance around $4.000 and might be setting its sights on the next upside targets marked by the Fibonacci extension tool.

The 38.2% level lines up with the swing high at $4.139 and might be the first take-profit point for bulls. Stronger upside momentum could take it up to the 50% extension at $4.207 or the 61.8% level at $4.275. The 76.4% level is at $4.359 and the full extension is near $4.500.

The 100 SMA is above the 200 SMA to indicate that the path of least resistance is to the upside or that support is more likely to hold than to break. The gap between the indicators is also widening to reflect strengthening bullish momentum.

RSI is pointing higher even without reaching the oversold region, suggesting that buyers are eager to return. Stochastic is also on the move up and has a bit of room to climb before reflecting overbought conditions, so buyers could stay in control.

Natural gas might be starting its seasonal uptrend, as cooler temperatures are lifting demand for heating commodities. This could be the case until the end of the year or the first two months of 2022, as winter season is expected to last until then.

Supply remains elevated as producers ramp up output to meet demand, but stockpiles are also being depleted by exports to countries undergoing an energy crunch. Winter has already set in Europe and China, and demand seems to be way more than their supplies can handle.

Risk appetite could also keep commodities supported throughout the remainder of the year, although profit-taking activity might be observed before 2021 comes to a close. Also note that any major headlines concerning the pandemic could have a strong impact on overall market sentiment and commodity price action.