Natural Gas has continued to trade in a tight channel between $2.96 and $2.80.
The channel, which was formed shortly after the start of the new year and was interrupted by a small breakout, is particularly evident on the 30-minute chart (not shown).
Traders will pay particular attention to the $2.96 resistance level which also holds natural gas’ 20-day MA. A breakout above this level could lead to strong upside momentum.
While the RSI for natural gas has formed a steady uptrend in recent trading (bullish), the MACD is closing which means that a crossover could be imminent (bearish).
A breakout in either direction is possible upon release of the EIA’s Weekly Gas Storage Report which is due Thursday at 10:30am EST.
The report usually incites high volatility, and traders will keep a close eye on the support and resistance levels of $2.80 and $2.96, respectively.