MCX-natural gas in a strong down-trend

Gurumurthy K BL Research Bureau | Updated on July 24, 2014 Published on July 24, 2014

The natural gas futures contract traded on the Multi Commodity Exchange (MCX) extended its fall last week as well.

The contract has been in a strong down-trend and has tumbled over 20 per cent from its high of ₹288.7 per mmBtu recorded on June 18.

The down-trend is expected to extend in the coming days as well. Though there is some support near the current level of ₹227, since the momentum of the fall is strong, the probability is less for an upward reversal from this support level.

So traders can go short at the current level. Stop-loss can be placed little wide at ₹242 for the target of ₹200. If the contract bounces from current levels, it will be just a corrective rally. Such rallies can be used as a good opportunity to accumulate more short positions at ₹235 and ₹240 levels.

MCX-crude oil: The MCX-crude oil futures contract has declined slightly after recording a high of ₹6,273 a barrel on Monday. Though the contract can fall further in the coming days, the 200-day moving average support is near ₹6,103 which can arrest the fall. A reversal from here can take the contract higher to its resistance at ₹6,280. The targets on a breach of this level will be ₹6,400 and ₹6,500.

The broader ₹5,950-6,550 sideways range remains intact. So, traders who took long positions last week can continue to hold on to their positions with the same stop-loss of ₹5,940 and a target of ₹6,400. Dips to ₹6,103 can be considered for accumulating more long positions.

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

Published on July 24, 2014
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