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On the back of the support at ₹185, the October futures contract of natural gas on Multi Commodity Exchange (MCX) has been rallying since last week. But the contract has moderated after facing resistance at ₹215.
Notably, the contract has largely been trading in a broad range between ₹185 and ₹215 for over a month. That said, the likelihood of it breaching the hurdle of ₹215 seems low and the contract is likely to decline from the current level.
The contract might decline below ₹200 and could retest the support of ₹185. The price area between ₹180 and ₹185 can be a support band. A break below ₹180 can intensify the sell-off.
The daily relative strength index is hovering in the neutral region whereas the moving average convergence divergence indicator in the daily chart lies in the bearish territory.
Given that the contract has been fluctuating in a broad range and the price is currently hovering around the upper end of the band, traders can short the contract on rallies with stop-loss at ₹220.
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