Natural gas is trending lower on its short-term chart, and it looks like a pullback to the channel resistance is taking place.

The Fibonacci retracement tool shows additional levels where sellers might be waiting to hop in. The 61.8% level lines up with the top of the channel at $4.927 then the 50% level is at $4.887. Price is already testing the 38.2% Fib that coincides with the mid-channel area of interest at $4.850.

If any of these Fibs hold as resistance, natural gas could resume the slide to the swing low at $4.719 or the channel bottom closer to $4.600. A break above the channel top or the swing high at $5.055, on the other hand, could set off a reversal from the slide.

The 100 SMA is starting to cross below the 200 SMA to indicate that the path of least resistance is to the downside or that the selloff is more likely to gain traction from here.

However, stochastic is moving higher to show the presence of bullish pressure, and the oscillator has plenty of room to climb before indicating overbought conditions. RSI is also on the move up, so price could follow suit while buyers are in control.

Natural gas could take cues from the upcoming release of inventory data by the Department of Energy. A draw might be reported since production has been limited over the past weeks on account of weather disturbances. Not only did these result to shut-ins among facilities, but it also left a lot needing repairs over the next few days.

However, analysts are expecting a build of 76 Bcf since demand also took a hit recently. Keep in mind that temperatures are starting to drop now that summer season is officially over, which weighs on purchases of cooling commodities like natural gas.