The November futures contract of Natural Gas on Multi Commodity Exchange of India (MCX), tumbled 6 per cent to ₹211 levels on Monday, tracking the global Natural Gas (Nymex) which has plunged 4.6 per cent to $2.86/mmBtu.
On November 2, the contract fell 2.3 per cent forming a bearish engulfing candlestick, after encountering a key resistance at ₹250. Since then, the contract has been on a short-term downtrend.
While trending down, the contract breached a vital base level of ₹225 that had subsequently turned into a key resistance.
On Monday, the contract tested the resistance at ₹225 and continued to trend downwards. The contract now trades above a key base level of ₹210.
It now trades well both 21- and 50-day moving averages. The daily relative strength index features has entered the bearish zone from the neutral region.
An emphatic break below the immediate support level of ₹210 can drag the contract down to ₹200 which is a psychological support to note. Further slump below this base can pull the contract down to ₹190 over the short term.
On the other hand, key barriers are at ₹218 and ₹226.
A strong rally above ₹226 is needed to alter the downtrend and take the contract northwards to ₹230 initially and then to ₹234.
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.