Natural Gas (NATGAS/USD) Price Technical Analysis for Oct. 14, 2021

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Natural gas looks ready to resume its longer-term climb, as price is bouncing off the trend line and area of interest around $5.100. The Fibonacci extension tool shows the next upside targets.

The 38.2% level is close by at $5.713 then the 50% Fib is at $5.912. Stronger bullish momentum could take natural gas up to the 61.8% Fib at $6.110 or the 76.4% level that lines up with the swing high. The full extension is at $6.753.

The 100 SMA is above the 200 SMA to indicate that the path of least resistance is to the upside or that support is more likely to hold than to break. Price dipped below the 100 SMA briefly but found its way back above this dynamic support level.

Stochastic is still heading up to show that buyers are in control, but the oscillator already reached the overbought zone to signal exhaustion. Turning lower might mean that sellers are returning.

RSI has more room to climb, so price could keep following suit until overbought conditions are met.

Natural gas drew support from rising imports by China, as flooding in several regions disrupted coal production and left businesses purchasing fuel elsewhere. In the US, demand has turned lower as temperatures are dropping and weighing on demand for cooling commodities.

However, purchases could pick up earlier than usual since stockpiling activity might drive purchases before winter season starts. Expectations of even higher prices later in the year could encourage businesses and consumers to buy in advance while prices are relatively lower.

The Department of Energy could report a slightly lower build of 97 Bcf versus the earlier 118 Bcf increase, possibly reflecting weaker supply conditions. Weather disturbances are also keeping output in check for some production facilities, and another set of tropical storms might keep this situation in play for much longer.

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