The sell-off continued in the MCX-Natural Gas futures contract last month as well. After tumbling 16 per cent in January, the contract plummeted another 13 per cent in February. However, the contract has managed to bounce back in the last couple of weeks from its low of ₹169. This bounce back move is significant as it has happened from ₹169 – the level which has been limiting the downside for the contract since July 2016. The 61.8 per cent Fibonacci retracement support is also poised around this level. So while above ₹169, a corrective rally to ₹205 or ₹210 is likely . Inability to break above ₹210 may keep the contract range-bound between ₹170 and ₹210 for some time. Traders with a high risk appetite can go long on dips near ₹175. Stop-loss can be placed at ₹160 for the target of ₹200. Revise the stop-loss higher to ₹185 as soon as the contract moves up to ₹190. The contract will come under renewed pressure only if it breaks below ₹169 decisively. Such a break, though unlikely, may drag the contract lower to ₹160 or even ₹150.

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