Natural gas is still stuck inside its short-term range as price bounced off the support and is now closing in on the resistance at $2.600. Technical indicators are giving mixed signals on whether or not it might hold.

The 100 SMA is crossing above the 200 SMA to indicate that buyers are about to take over, possibly resulting in a break higher. If that happens, natural gas could climb by the same height as the chart pattern, likely taking natural gas up to $2.700 next.

Price is also moving above both indicators, so these could hold as dynamic support on pullbacks.

Stochastic is turning lower after reaching the overbought zone, though, so a return in selling pressure might follow. In that case, natural gas could still slide back to the range bottom. Stronger selling pressure might even lead to a break below support and a drop that’s the same height as the range, possibly taking it down to $2.400 next.

Similarly RSI is also heading lower after reaching the overbought zone to signal exhaustion among buyers.

Natural gas popped higher after the Department of Energy reported a larger than expected draw of 36 Bcf versus the expected reduction of 21 Bcf. This is also larger than the earlier drop of 11 Bcf, reflecting a large pickup in demand for heating commodities.

Lower temperatures may have supported the demand for natural gas, and expectations of milder weather in the weeks ahead likely led businesses to shore up on purchases of the heating commodity.

Risk appetite might also be in favor of more natural gas price gains as traders focus on easy monetary policy, vaccination efforts, and government stimulus. In addition, the blockage in the Suez Canal could also limit the movement of commodities, which might then put upside pressure on prices as supply is limited.