Selling gas while getting closer to upper limit of descending channel with $2.375 target

An upward movement within a descending channel is currently observed in the natural gas (NG) market. This price action suggests limited bullish potential and a high risk of a correction. It is now approaching $2.806 near the channel’s upper boundary, which could act as a key resistance that will send quotes down.

On the daily chart, the Stochastic Oscillator's %K and %D lines are at 56 and 39, respectively. The %K one has recently crossed above the %D, enhancing bullish sentiment. However, this signal appears to be the result of a technical rebound caused earlier by the proximity to oversold territory, rather than the beginning of a new uptrend. Given that the price is now testing the channel’s upper boundary—which reflects temporary buyer dominance—this upward impulse is nearing exhaustion.

The MACD indicator confirms the weakness of the current uptrend. The MACD line is below the signal one, with a significant gap between them, suggesting that the underlying bearish trend remains intact. Therefore, the upward movement is unlikely to last long.

Cumulatively, all the indicators identify the current rally as a corrective move within a broader descending channel. The probability of a breakout above the upper limit is low. This scenario would require a much stronger buying interest, which is not seen on the chart. A pullback to the mid-channel, where the price could test support near $2.375, is more likely.

Fundamentals contribute to the current technical setup. According to Vaisala forecasts, the weather in the United States in early September will be below average, meaning a potential decline in natural gas demand for air conditioning. At the same time, fuel production in the US is now close to record levels. Both of these factors will limit the price growth.

Consider the following trading plan:

Sell natural gas at the current levels or when the price gets closer to the upper boundary of the channel. Take profit: $2.375. Stop loss: $3.000.

The forecast remains valid from August 28 to September 4, 2025.