Natural Gas prices have been on a recovery rally over the last couple of weeks. The Natural Gas futures contract on the Multi Commodity Exchange made a low of ₹128.50 per mmBtu in mid-February. From there the price has surged to ₹162 per mmBtu now.
Outlook
The broader trend is down. Within this the current rise seems to be a corrective rally. On the charts, the short-term picture is positive. As such the chances are looking high for the Natural Gas futures contract to move further up from here.
Immediate support is at ₹160. Below that ₹157 is the next important support. As long as the contract trades above ₹157 the outlook will remain positive. The Natural Gas futures contract can move up to ₹170. A break above ₹170 can take the contract further up to ₹180 in the next few weeks.
To turn the outlook negative, the contract has to fall below ₹157. That will indicate the resumption of the overall downtrend and will drag the contract lower.
Trading strategy
Traders with high-risk appetite can go long now at around ₹162. Accumulate on dips at ₹159. Keep a stop-loss at ₹156. Trail the stop-loss up to ₹164 as soon as the contract moves up to ₹166. Move the stop-loss further up to ₹167 when the price touches ₹169. Exit the longs at ₹170.