This commodity has re-entered an upward trend and can be a winner into 2026, says Katie Stockton

Natural gas prices have re-entered a longer-term uptrend channel after a six-month downtrend, signaling potential for higher prices over the intermediate term and into 2026. The United States Natural Gas Fund (UNG) has experienced a fresh short-term breakout, completing a bullish double-bottom pattern and targeting its 200-day moving average near $16. This positive momentum is further supported by a bullish MACD crossover and UNG's improved performance relative to equities, offering diversification benefits due to its near-zero correlation with the S&P 500.

Analysis

Natural gas prices have decisively re-entered their longer-term uptrend channel, emerging from a six-month downtrend. This breakout, supported by a fresh short-term breakout in the United States Natural Gas Fund (UNG) above its daily cloud model resistance, signals potential for higher prices into 2026. The UNG breakout completes a bullish double-bottom pattern, indicating strong technical momentum.

Intermediate-term momentum for UNG has significantly improved, evidenced by a bullish MACD crossover on the weekly chart and stabilization at the November 2024 long-term support level of $12.30. The fund is now targeting its 200-day moving average near $16 in the coming weeks, a level that previously acted as support in January and now represents a resistance zone.

UNG has demonstrated improved performance relative to equities over the past three months, with its ratio against the S&P 500 Index (SPX) clearing its 50-day moving average and showing an upward slope. This shift reflects enhanced intermediate-term momentum for natural gas compared to broader equity markets. Furthermore, UNG's near-zero 40-day rolling correlation with SPX positions it as a valuable diversifier, particularly if equity markets experience weakness.

Key Decisions for Investors

• Consider initiating or increasing long exposure to natural gas via UNG, given the confirmed technical breakout, bullish momentum indicators, and a near-term price target of $16.
• Monitor the $15.90-$16 resistance zone (200-day MA) for a decisive breach, which could signal further upside potential beyond the initial target.
• Evaluate UNG for portfolio diversification purposes, leveraging its near-zero correlation with the S&P 500, especially in scenarios of potential equity market weakness.