Natural Gas prices have begun the week on a strong note by rising about 2 per cent. Prior to this rise today, the prices were consolidating for more than a week now. The Natural Gas futures contract on the Multi Commodity Exchange (MCX) has been oscillating in a range of ₹186-₹204 per mmBtu. This range has been broken today. The contract has risen breaking above ₹204 and is currently trading at ₹206 per mmBtu.
Outlook
The break and rise above ₹204 today indicates that the consolidation phase has ended and the uptrend has resumed. Immediate support is at ₹203. Below that ₹199-197 is the next important support. The contract can rise to ₹212 in the near-term. Failure to breach ₹212 can trigger a corrective fall to ₹204 first. Thereafter, the contract can rise back again and move above ₹212. That rally will have the potential to target ₹225-₹230 on the upside in the coming weeks.
The region between ₹190 and ₹185 is a strong support zone. The outlook will turn bearish only if the contract declines below ₹185. If that happens, we can see a fall to ₹170 and lower. However, on the charts, the bias is positive. As such, the uptrend is likely to intact. Any fall will see fresh buyers coming in to the market at lower levels and limit the downside.
Trading strategy
Traders can go long now at ₹206. Accumulate on dips at ₹204. Keep the stop-loss at ₹195. Trail the stop-loss up to ₹209 when the price touches ₹211. Move the stop-loss further up to ₹218 when the contract goes up to ₹221. Exit the long positions at ₹225.