Natural Gas: Crucial trend deciding resistance ahead bl-premium-article-image

Gurumurthy KBL Research Bureau Updated - January 08, 2024 at 02:20 PM.

The price action around ₹241 will need a close watch to gauge the next direction of move.

Natural Gas prices have risen significantly last week, providing some breather for the commodity. The MCX Natural Gas futures contract on the Multi Commodity Exchange (MCX) fell to a low of ₹186.90 per mmBtu in the first half of December last year. The bounce-back from that low ran into a sideways consolidation phase between ₹200 and ₹220 for a couple of weeks. After this consolidation, the price had surged over 11 per cent last week. MCX Natural Gas futures contract is currently trading at ₹238 per mmBtu.

Outlook

The short-term trend has been down since November last year. The bounce last week, though gives some relief, does not indicate a strong reversal.

A crucial resistance is at ₹241 which can be tested in the coming sessions. The price action thereafter will need a very close watch. A decisive break above ₹241 will indicate a trend reversal. Such a break can take the Natural Gas futures contract up to ₹260 first. An eventual break above ₹260 will then clear the way for a revisit of ₹300 levels over the medium-term.

On the other hand, if the contract turns down failing to breach ₹241, then the price can fall back to ₹220. A further break below ₹220 will see the Natural Gas futures contract declining towards ₹200 and lower again.

Overall, the price action around ₹241 will need a close watch to gauge the next direction of move.

Trade strategy

We suggest traders to stay out of the market. See what happens to the resistance at ₹241. Trades can be taken accordingly thereafter.

Published on January 8, 2024 08:50

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