Buying natural gas on dip before next leg up

The natural gas (NG) market is undergoing a pullback after its recent bullish momentum, with selling pressure starting to subside near a key support zone. As of this writing, prices have risen from the trading session's opening to $3.134. 

This pause is evident in the oscillators' behavior. Although they remain bearish, they have lost their aggressive dynamics. The Stochastic Indicator (5, 3, 3) has turned down from neutral territory and stalled at %K=51 and %D=50. The fuel market is now showing signs of stability, with little to no significant selling pressure. Further downward or sideways movement is possible before a new recovery takes place. A more pronounced bearish signal comes from the Chaikin Oscillator, which failed to confirm the local peak on October 7 and 8, and remains in negative territory.

The fundamental backdrop for natural gas is still mixed, balancing long-term supportive risks against short-term bearish pressures. Ongoing difficulties with Ukrainian infrastructure pose a danger of supply contraction in Europe, potentially leading to greater demand for imported LNG and confirming a long-term uptrend. Current price declines, however, stem from mild US weather forecasts that lessen heating consumption, coupled with record American production volumes that drive up storage refilling. Despite this, Europe is heading into winter with inventories at 83%, a marked decrease from 94% last year. Ukraine's elevated LNG usage to offset its production losses could intensify competition for Atlantic basin supplies, setting the stage for future price hikes.

Technically, quotes seem to have found temporary support near the 38.2% Fibonacci retracement, which is around $3.110. This suggests that a period of consolidation may follow the recent drop. Nevertheless, buyer strength cannot be confirmed with this stabilization alone. The next significant challenge for the bulls is to reclaim and consolidate above the 23.6% Fibonacci resistance at $3.190, a move that would pave the way for testing higher price zones.

Consider the following trading plan: 

Buy NG in the $3.100–$3.190 range. Take profit: $3.350. Stop loss: $3.050.

This forecast is valid from October 9 to October 16, 2025.