The U.S. Natural Gas Fund (NYSEArca: UNG), which tracks near-month natural gas futures contracts traded on the New York Mercantile Exchange, has tumbled 16.5% in the past 90 days, but improving technicals indicate the volatile fund could deliver some near-term upside.

Some warmer-than-expected weather in some parts of the U.S. could also help UNG. Commodity Weather Group forecasts higher-than-normal temperatures in the Midwest through Sept. 5. [Natural Gas ETFs Extend Rally After Supply Data]

Technical analyst Chris Kimble noted that UNG has found support in a price area that was previously resistance created a downtrend line. Kimble pointed out that on Tuesday, UNG made an “engulfing bullish pattern.”

Others see an encouraging technical of natural gas futures. “Looking at the daily chart for October Natural Gas, we notice what appears to be a ā€œVā€ shaped bottom forming on the chart, which corresponds with the 14-day RSI moving into oversold territory. Prices are now trading above the 20-day moving average and momentum has turned positive with a current reading of 53.016. Resistance for the October contract is found at the 200-day moving average currently near the 3.825 level, with support found at the August 8th low of 3.154,” according to OptionsExpress.

As for fundamentals, hurricane season is approaching. If major storm does hit the Gulf of Mexico, that could lead to some supply disruption, although the shale boom has made natural gas prices less vulnerable offshore supply interruptions. [Natural Gas ETF Bounces Back to Two-Week High]

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