Natural gas futures have been on a decline over the past week. The June contract on the MCX, which made a high of ₹263.4 last week, fell and closed at ₹223.1 on Wednesday.
While the broader trend remains bullish, there is a chance for the contract to see some more correction before resuming the rally. So, going ahead, natural gas June futures is likely to fall to the ₹205-210 price band and then rally, potentially to ₹270.
On the other hand, if the contract breaks below the support at ₹205, the short-term outlook can turn bearish. In such a case, natural gas futures can see a drop to ₹170.
Nevertheless, as it stands, the contract retains the bullish bias and so, traders can consider long positions, not at the current level, but on a dip in price.
Trade strategy
Stay out for now. Buy natural gas futures if its price dips to ₹205. Place stop-loss at ₹195. When the contract rises above ₹235 after this trade is initiated, raise the stop-loss to ₹220. Book profits at ₹250.
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.