Nat Gas Consolidating Ahead of Another Upleg

Increasingly, nearby natural gas futures appear to be consolidating their April-July gains (1.902 to 3.277) between 2.60/70 on the low side and 3.00/20 on the high side.  My work considers this to be a sideways digestion area in preparation for the next recovery upleg that projects to 3.40/50 and then to 3.90-4.00.

That said, natural gas must hurdle and sustain above its most recent rally peak at 3.070 in order to unleash the buying power to propel prices to the above-mentioned targets.

At this juncture, only a decline that breaks support at 2.70/60 will compromise my preferred intermediate-term scenario.  ETF traders may want to watch the U.S. Natural Gas ETF (UNG).