Natural gas has staged an impressive breakout above its inverted head and shoulders pattern neckline on the short-term time frame, signaling that a bullish reversal could be gaining traction.

Price surged from the swing low around the $3.131 level all the way up to the swing high near $3.674, carving out a sharp impulsive rally in the process.

However, price appears to be pulling back from the $3.674 high, likely retracing to test the broken trend line as a new support zone and gather more bullish momentum before the next leg higher. The Fibonacci retracement tool highlights key levels where buyers could be waiting to join in on the move.

The 38.2% Fib sits at $3.467, which lines up closely with the initial area of interest. A deeper pullback could reach the 50% level at $3.403, while a larger correction might extend to the 61.8% Fib at $3.339, which coincides with the broken trend line and could serve as the line in the sand for a bullish retest scenario.

On the moving averages front, the 100 SMA is below the 200 SMA, suggesting that the broader path of least resistance still leans to the downside. That said, price has pushed convincingly above both indicators, which could now flip to act as dynamic support on any dips.

Stochastic is pulling back from the overbought region, reflecting some exhaustion among buyers and hinting that the current pullback has room to extend before sellers are worn out. RSI, meanwhile, has retreated from elevated levels but remains relatively constructive, suggesting that bullish momentum hasn’t fully dissipated.

If any of the Fibonacci levels manage to keep losses in check and attract fresh buying interest, natural gas could resume its climb back toward the $3.674 swing high and potentially push even higher. Natural gas could keep taking cues from crude oil, as the expected energy crisis from the Middle East conflict could keep propping energy commodities higher.