The outlook for the natural gas futures contract traded on the Multi Commodity Exchange (MCX) has turned bearish. The contract was range-bound between ₹175 and ₹185 per mmBtu for more than a month. It has decisively fallen below its support at ₹175 in the past week. It is currently trading at ₹170. Immediate resistance is at ₹172 and a subsequent key resistance is at ₹175. Intermediate rallies to these resistances can attract fresh selling.

Support for the contract is at ₹168. A break below this, can drag the contract lower to ₹160. Traders can go short on a break below ₹168. Stop-loss can be placed at ₹173 for the target of ₹161.

MCX-Crude oil: The contract has been stuck inside a range of ₹2,900 and ₹3,150 per barrel for three consecutive weeks. It is currently hovering just above the lower end of this range at ₹2,975. A breakout on either side of this range will decide the next leg of move for the contract.

A strong break above ₹3,150 will be bullish. The ensuing targets on such a break will be ₹3,278 and ₹3,340 – the 200- and 100-day moving average resistances .

On the other hand, strong declines below ₹2,900 will increase the downside pressure and drag the contract lower to ₹2,800 and ₹2,700 thereafter.

Traders can wait on the sidelines until a clear trade signal emerges.

Note: The recommendations are based on technical analysis. There is a risk of loss in trading.

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