Natural Gas prices has been moving up since the start of this week. The Natural Gas Futures contract on the Multi Commodity Exchange (MCX) has risen breaking the resistance at ₹227 per mmBtu sideways range on the upside. The contract is currently trading at ₹231 per mmBtu.
Outlook
Immediate resistance is at ₹233. This level of ₹233 is an important medium-term trendline resistance. The Natural Gas Futures contract has to breach this hurdle to move further higher. Such a break can take the contract up to ₹250 over the next couple of weeks.
On the other hand, if the contract fails to break above ₹233 and turns down it can come under selling pressure. In that case, a fall to ₹220-₹217 can be seen. It will also keep the contract under pressure to see a steep fall to ₹205 and even ₹200 eventually in the coming weeks.
From a slightly larger picture, the Natural Gas Futures has been range bound between ₹200 and ₹235 since mid-June. So, a reversal from around ₹233 will keep the broader sideways range intact. As such, the price action around ₹233 will need a very close watch this week.
Trade strategy
Since ₹233 is a crucial resistance, we suggest traders to stay out of the market for some time. Watch what is happening around ₹233 and then trades can be taken accordingly.