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The downtrend that was in place in the MCX-Natural gas contract since October from the high of ₹225.2 per mmBtu halted around ₹171 last month. The contract has reversed sharply higher from this low and is now poised well above the 38.2 per cent Fibonacci retracement level of ₹221. This level will now act as a good support. A rise to test ₹256 — the 50 per cent Fibonacci retracement resistance — is possible. Such a rise will boost the medium-term bullish view. The possibility of revisiting ₹300 levels will be high in such a scenario. Traders with a medium-term perspective can go long on dips at ₹225. Stop-loss can be placed at ₹190 for the target of ₹290. Accumulate longs on dips near ₹210. But the near-term view will turn bearish if it declines below ₹221. Such a break can take the contract lower to ₹210. A break below ₹210 may drag the contract further lower to ₹200 or even ₹190 thereafter.
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