Comments
Natural gas prices fell last week and are now attempting to bounce back. The natural gas futures contract on the Multi Commodity Exchange (MCX) fell to ₹159 per mmBtu before bouncing back to ₹171 per mmBtu. Our forecast last week for a rise to ₹195 and beyond stands negated now.
Outlook
The MCX natural gas futures contract has been in a downtrend since mid-June. Strong resistances are at ₹174 and ₹179. As long as the contract trades below ₹179, the downtrend will remain intact.
As seen from the chart, the chances are high for the contract to reverse lower from ₹174. That leg of fall may drag the contract down to ₹153 in a week or two.
To turn the outlook bullish, the contract must breach ₹180 decisively and sustain above it. If that happens, then there could be a rise to ₹190-195. But this break requires a strong positive trigger.
Trade strategy
Traders can go short now at ₹171 and accumulate at ₹173. Keep the stop-loss at ₹178. Trail the stop-loss down to ₹168 as soon as the contract falls to ₹164. Move the stop-loss down to ₹161 when the price touches ₹159. Exit the short positions at ₹156.
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.