The short-term uptrend in natural gas futures traded on the Multi Commodity Exchange (MCX) seems to be in a danger of reversing. The contract recorded a high of ₹189.3 per mmBtu on Monday and has come off sharply from there.

It is currently trading near ₹177. Immediate resistance is at ₹180. Inability to breach this hurdle could increase the downside pressure on the contract. As long as the contract trades below ₹180, there is a strong likelihood of seeing a fall to ₹172 – the 21-day moving average support or even ₹169. Short-term traders with high risk appetite can initiate fresh short position. Stop-loss can be placed at ₹181 for the target of ₹172. Intermediate rallies to ₹180 can be considered to accumulate more short positions.

The downside pressure will ease only if the contract records a strong break above ₹180. Such a break can take the contract higher to ₹189 once again.

Crude oil: Crude oil futures have been range-bound between ₹3,000 and ₹3,350 a barrel over the last three weeks.

The contract is trading near ₹3,120. The immediate outlook is not clear. So traders can stay out of the market until a clear trade signal emerges. A breakout on either side of ₹3,000-3,350 will determine the next trend for the contract. A strong break below ₹3,000 will be bearish and can drag the contract lower to ₹2,900 and ₹2,750. On the other hand, a break above ₹3,350 can trigger a rally to ₹3,450 and ₹3,550.

Note: The recommendations are based on technical analysis. There is a risk of loss in trading.

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