The natural gas contract on the MCX retains its strength and rallied for the third consecutive month. It surged 9.7 per cent last month to close on a strong note. Strong support is in the ₹225-₹220 region.
The outlook for the contract will turn negative only if it breaks below this support region. But such a strong fall looks unlikely at the moment. The 21-week moving average is on the verge of crossing over the 200-week moving average. This is a bullish signal and it suggests that the downside in the stock could be limited. A rise to ₹280 and ₹290 looks likely.
The level of ₹290 is the 61.8 per cent Fibonacci retracement resistance which may halt the current uptrend. A corrective fall to ₹250 or ₹240 from there cannot be ruled out. Medium-term traders who have taken long positions on dips near ₹225 can hold it. Retain the stop-loss at ₹190 for the target of ₹290. Accumulate on dips near ₹225. Revise the stop-loss higher to ₹230 as soon as the contract moves up to ₹275.
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.