Natural gas (NG) prices are currently hovering around $2.80. Despite the ongoing surplus issue, the fundamental picture is getting better. High temperatures in southern and eastern parts of the United States are what keep quotes afloat, lifting fuel demand from power stations. Recovering flows to LNG terminals after maintenance works were partially completed could provide another positive factor that boosts exports. However, record production and stockpiles above the five-year average continue to sour the mood and cap the asset’s upside. Investors will closely watch the upcoming Energy Information Administration (EIA) inventory report. If the injection volume falls below the typical seasonal reading, it will indicate a tightening market balance and could fuel a rally.
The technical picture is also gradually improving. Prices are now sitting above the 50-day exponential moving average (EMA50), pointing to continued upward momentum in the medium term and confirming buyers’ advantage. As long as NG stays higher than this line, any pullback could be seen as a local correction within a broader uptrend.
To reinforce this point, let’s turn to the Relative Strength Index (RSI), which stands near 70. What does this tell us? A strong bullish impulse and approaching overbought territory. Nevertheless, there are no clear signs of a trend reversal. On the contrary, when a strong uptrend persists, the indicator can remain at elevated levels for an extended period of time. The next upside target could be a two-month high of $3.
The final recommendation:
— Buy natural gas at the current price of $2.80, aiming for $3 within one month.
— Place a Stop Loss order at $2.65 to manage risks if the market plays against us.
This content is for informational purposes only and is not intended to be investing advice.
