By Doug Busch
Natural gas has come under pressure even as crude oil rallied, highlighting a disconnect between a globally tight oil market and a gas market burdened by excess supply and muted weather-driven demand.
But with prices now deeply discounted and signs of tightening beginning to emerge, that divergence may be nearing an inflection point, opening the door for natural gas and its stocks to play catch-up.
Looking at the United States Natural Gas Fund shows how dramatic the commodity's pullback has been. On the ratio chart against the United States Oil Fund, notice the bifurcation started in early February, several weeks before the Iran conflict began. But a reason to be optimistic about natural gas is how the ETF filled the gap just above the very round $10 number on April 14 from the Jan. 16 session. Notice how influential the bearish island reversals were in spotting near term tops completed on Dec. 8 and Feb. 2. A doji candle on Dec. 5 caused the fund to quickly drop back underneath its 200 day simple moving average.
The United States Natural Gas Fund was trading around $10.70 Thursday.
Let's look at a couple of beaten-down stocks in the group that could be positively impacted.
Cheniere Energy, a converter and global shipper of natural gas, is up 35% year to date but has dropped 13% from its annual peak reached at the end of March, creating an opportunity.
Looking at its daily chart shows how round number theory has come into play at the $300 figure. A bearish engulfing candle there was recorded after a failed bull flag breakout. It has since endured a drawdown to its rising 50 day simple moving average, an area that aligns with a prior long cup base breakout. When this occurs initially, it often makes for a solid entry. Given that the pattern lasted nine lengthy months, taking out a pivot of $246.52 makes this more likely to succeed.
Since the start of March it has performed well against the overall energy space on the ratio chart against the State Street Energy Select Sector SPDR ETF. One can enter here and aim for a move toward $310 by mid 2026, an 18% gain from current prices. Remain bullish above $247.
Cheniere Energy was trading around $262 Thursday.
Expand Energy, a natural gas producer, is down 11% year to date and 7% over the last year, paying a dividend yield of 2.4%. It is now trading 23% below its 52 week high and has dropped a combined 13% over the last two weeks.
Looking at its daily chart this has lagged the energy complex since last December but I believe it will come out of its slumber shortly. Thursday looks set to complete a bullish morning star pattern after slicing below the very round $100 number, an area from which the stock bounced four previous times dating back to last October, including a doji candle on Oct. 30. I believe this is a bear trap below $100 and the chart will witness a quick rebound as a potential double bottom base takes shape.
Notice the bearish shooting star that started the weakness on Dec. 5. After an 11-session losing streak, one can enter here and look for the stock to travel toward $140 by year-end, a 44% gain from current prices. Remain bullish above $94.50.
Expand Energy was trading around $97 Thursday.
If the current trend holds, natural gas and related assets may reverse course and regain ground in the weeks ahead.
Doug Busch is the senior technical analyst at Barron's Investor Circle . His technical view is added to stock picks, including those published exclusively for Investor Circle readers. A glossary of technical terms is updated regularly with new entries.
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 16, 2026 14:23 ET (18:23 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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