Bake Up a Good Chemical Reaction with Gas

After an impressive run-up last week, natural gas is coming in off short-term overbought conditions, seen on the daily chart for the UNG ETF, below. 

Although there have been quick-hitting, actionable long trades in natural gas in recent years, on the whole natty has been mired in a bear market since 2008. Unlike other commodities in 2016, natty has taken its sweet old time making any upside progress, to boot, cementing its legacy as a perennial heartbreaker for bulls. 

Still, taking the price action at face value, last week could have easily served as a baby step in the right direction for at least some type of minor low into summer. 

I am looking to see whether $6.90 now holds below, effectively converting from prior resistance into newfound support, a basic tenet of constructive technical analysis for a chart attempting to assert a new bull case.

Below there, the $6.30-$6.50 was fairly well-defended in early-April, enabling last week's rally to materialize. Indeed, that area needs to hold for any long case to have a chance this summer. 

One viable scenario now would be a multi-day consolidation over $6.90 before this Thursday's natural gas inventory report, which then triggers a fresh move up to $7.50 or so.