Natural gas rally meets profit-taking after bounce from April lows

As of April 22, natural gas (NG) is trading at $2.725 per million British thermal units (MMBtu), creeping up from its monthly lows. But don't expect the rally to last long. Profit-taking may be just around the corner, as traders come to terms with a simple truth: the speculative fire sparked by the Strait of Hormuz standoff has already burned out—and it's no match to the stubborn supply overhang filling US storage facilities. 

Despite all the fuel drama overseas, the American market remains surprisingly insulated, at least in the short run. Storage levels are currently sitting well above the seasonal norm. On April 17, inventories were approximately 7% higher than the five-year average. And with the market drifting into the demand doldrums, every warm week only deepens the surplus.

What's more, the forecast for late April and early May adds insult to injury. The Midwest is bracing for a significant warm-up, which is about to hammer any lingering heating needs and keep storage injections running at maximum tilt. Since the off-season is still in full swing, current prices appear overvalued. Don't expect them to rise above $3.00 until mid-May at the earliest. 

From a technical standpoint, the daily chart shows quotes bouncing from the April 14 low at $2.59. The Stochastic Oscillator confirms the move, having recently climbed out of oversold territory. Nevertheless, its fading momentum suggests the rally could be running out of gas. The Average Directional Index (ADX), now standing at 16, reveals the obvious: no strong trend is in play. That said, short-term bulls have reason to stay hopeful. The +DI line (16) has crept above the -DI one (13), pointing to a gradual shift in sentiment since mid-April, with buyers slowly gaining ground and sellers losing their edge.

For those looking to act, pay attention to the trading plan down below:

Sell NG at the current price. Place Take profit at $2.62. Set Stop loss at $2.77.

This forecast holds true from April 22 till April 29, 2026.