Natural gas is still trading inside its short-term range, testing support at the $2.500 mark. Price could be due for a bounce back to the range resistance from here.

Stochastic is already indicating oversold conditions and is starting to pull higher to reflect a return in bullish momentum. A bullish divergence is also forming, with the oscillator making higher lows and price having lower lows.

RSI also seems to be heading up without reaching the oversold region, suggesting that buyers are eager to take over. Both oscillators have plenty of room to climb, so bullish momentum could stay in play for much longer.

The 100 SMA is below the 200 SMA for now, so the path of least resistance might be to the downside. In other words, there’s still a chance for support to break. If that happens, natural gas could fall by the same height as the chart pattern.

Then again, the gap between the indicators is narrowing to reflect slowing bearish pressure and hint at a potential bullish crossover that would draw buyers back in.

Natural gas traders are likely waiting for the release of the Department of Energy’s inventory report, which might reveal a draw of 21 Bcf versus the earlier reduction of 11 Bcf. If so, that would reflect stronger demand for heating commodities as temperatures cooled over the past weeks.

However, supply might have also picked up as producers likely ramped up operations to account for lost output when the winter storms led to temporary shutdowns in facilities. Then again, traders might also take the latest numbers with a grain of salt, as supply might be limited by the blockage in the Suez Canal this week.

Risk appetite would likely impact commodity movements as well, as increased focus on vaccination efforts and the resurgence in COVID-19 cases in several parts of the globe continue to impact sentiment.