Natural gas formed higher lows and lower highs to trade inside a symmetrical triangle on its 1-hour time frame. Price is finding support at the triangle bottom but is also approaching the peak of the triangle to signal that a breakout might follow.
The 100 SMA is below the 200 SMA to indicate that the path of least resistance is to the downside or that support is more likely to break than to hold. The 100 SMA lines up with the triangle bottom to add to its strength as support, though.
Also, the gap between the indicators is narrowing to reflect weakening selling pressure and a potential bullish crossover. If that happens, bulls could still take control and spur a test or break of the triangle top. From there, price could be in for a climb that’s the same height as the chart formation, which spans $2.250 to $2.500.
RSI is on the move down to indicate that sellers have control, and the oscillator is about to cross the center line to reflect a pickup in selling pressure. Stochastic is also heading lower so price might follow suit while bears have the upper hand.
Natural gas was able to hold its ground somewhat as the Energy Information Administration reported that domestic supplies of natural gas fell by 19 billion cubic feet for the week ended Nov. 29. Analysts expected a fall of 21 billion cubic feet, on average, according to a survey conducted by S&P Global Platts.
However, slowing international demand and relatively mild temperatures in the US are preventing prices from heading much further up. Also, LNG exporters have to deal with the launch of a new pipeline that will send 38 billion cubic meters of gas to China by 2024.