Comments
The price of natural gas futures on the Multi Commodity Exchange (MCX) has been on the decline since mid-June. It fell off the barrier at ₹275.
However, after marking a low of ₹169.1 early this month, the contract has recovered. But then, it was capped at ₹204, a resistance where the 50-day moving average coincides.
Nevertheless, the price action over recent weeks shows that the downtrend is losing momentum. That said, for the trend to turn bullish, the price should cross ₹204.
If a breakout of ₹204 occurs, natural gas futures can rally to ₹234. The 61.8 per cent Fibonacci retracement of prior downswing coincides at ₹234, making it a strong hurdle.
On the other hand, if the contract slips below ₹170, it can drop to ₹160, a good support. A breach of this can intensify the sell-off, possibly leading to a fall to ₹135.
Trade strategy
While the September futures of natural gas trade within the ₹170 and ₹204 band, the next leg of trend will be uncertain. So, traders can refrain from taking fresh trades at the moment.
Yet, traders with a high risk appetite, can buy now at ₹178, with a stop-loss at ₹165. When the price hits ₹190, revise the stop-loss to ₹180. Book profits at ₹204.
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.