Natural gas futures on the Multi Commodity Exchange (MCX) has been charting a sideways trend since mid-June. The September expiry has been oscillating between ₹215 and ₹235, except for a false breakout that occurred early August when it rallied and marked a high of ₹257.1. However, the contract fell immediately back to the ₹215-235 range.
The contract is currently trading at around ₹220. From here, we expect September futures to dip to ₹215 and then rise again to the range top of ₹235. If the contract breaks out of ₹235, it can retest ₹255. On the other hand, if the contract slips below ₹215, it can fall to ₹200.
Also read: Movers & Shakers: Stocks that will see action this week
Since the range is holding well, there is a high probability for a rebound from the ₹215 levels, and thus, there is a buying opportunity.
Trade strategy
Initiate fresh long positions in September natural gas futures when the price moderates to ₹215. Keep stop-loss at ₹208. When the contract touches ₹230, alter the stop-loss to ₹220. Book profits at ₹235.
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.