NG short-term bullish next few days/weeks

Since April 25th, there have been several days in the June contract when the commercial hedgers (in my view) have applied downside pressure to the market with little-to-no follow through.   A flurry of aggressive accumulation has limited downside later in the day on several occasions.  This activity has resulted in relatively buoyant NG prices after cash hit multiyear lows in late April.  

But today there was a consistent stream of hedger buying with solid follow through, and I cannot recall the last time seeing this in 2019 considering the heavy multi-month downtrend.

The daily NG 06-19 chart shows the True Range on reversal day 4/25 was greater than any reading all month until that day which is a common pattern I have been seeing in other instruments experiencing a recent trend change (ie VIX).   

The RSI(7) on the NG and UNG daily charts has crossed the 50% mark after putting in higher lows like Feb 20th which led to further upside days/weeks later, and the market is trading above the 20-SMA for the first time since mid-March showing unusually relative strength and a possible change in supply/demand.

I see 2.700 as resistance and 2.72 handle after that near the 50- and 200- SMA lines which are nearly intersecting.  OTM calls and calls spreads present good risk:reward trade opportunities at this point.

The fundamental picture is less clear than the technical picture painted above:

1.) Nat-gas production in the 48 states has been trending higher relative to last year since the injection season started

2.) EIA inventories has been coming in higher than expected over the past few weeks.

3.)Tight supplies at 17.8% below 5-year average, but the injection season has lessened the constraint so far this season.

4.) Permian oil production has released excess nat-gas causing elevated flaring; NG prices in the Permian have even gone negative due to pipeline constraints.  

5.) LNG exports have been trending up sharply this year with expectations of further gains in the medium and long term.

6.)Large projects like port facilities to export LNG have faced delays/cancellations due to inability to price debt with disagreements about a benchmark.

With tight supplies, a weather-related shock can overwhelm the outdated NG pipeline infrastructure causing regional price spikes.  A perfect storm may be currently brewing as the Midwest and Northeast are expected to have cooler than normal temperatures in the next few days and the Southeast and mid-Atlantic higher than normal which could potentially put a squeeze on NG power plants.