Natural gas could be done with its slide as price broke above the neckline of its double bottom on the 1-hour time frame. Price could be in for a rally that’s at least the same height as the chart formation, which spans $0.100.

The 100 SMA is below the 200 SMA, though, so the path of least resistance is to the downside. In other words, there’s still a chance for the selloff to resume. Price is currently finding some resistance at the 200 SMA dynamic inflection point and could retreat to the bottoms if this area keeps gains in check.

Stochastic has been indicating overbought conditions for quite some time and looks ready to head south. Price could follow suit as sellers take over, especially since the oscillator has plenty of room to go before reaching the oversold area.

RSI has also indicated exhaustion among sellers and could be due to turn lower soon. If the broken neckline holds as support, the uptrend might gain even more traction.

Natural gas is enjoying some upside on account of risk-taking and forecasts of cooler weather conditions. Recall that the commodity took a hit as weather agencies predicted warmer than usual temperatures for this time of the year, leading traders to predict weaker demand for the heating commodity in the coming weeks.

The upcoming inventory report could provide better insights on supply and demand conditions, as a draw would mean that purchases have picked up while a build would suggest that demand remains feeble. The previous release printed a draw of 187 Bcf, so a larger reduction might mean a strong rally for the commodity while a smaller drop might still yield a few price gains.

Note that the FOMC statement and the US advance GDP release would likely impact overall sentiment and commodity price movements around the middle of this week as well.