Commodity Calls

Buy MCX natural gas with stop-loss at ₹273

Akhil Nallamuthu BL Research Bureau | Updated on August 18, 2021

Targets for the future contract placed at ₹300 and ₹310

 

The continuous futures contract of natural gas on the Multi Commodity Exchange (MCX), which declined during the last two months of 2020, attempted a recovery towards the end of January this year. That is, after taking support at ₹180, the contract started to appreciate. However, after hitting ₹240 in mid-February, the contract lost momentum and saw a drop in price. Within a month, the price fell back to ₹180, thereby losing a considerable 25 per cent from the prior highs. But since ₹180 is a strong base,

the futures resumed the rally and this time, it successfully breached the hurdle at ₹240 by the end of June and made a fresh high of ₹312.2 before a couple of weeks. The price action on the daily chart shows that the price band of ₹310 and ₹312 is acting as a strong barrier as it prevented the rally twice in the past one month. The contract slowly drifted lower and is now trading around ₹285.

While the price has dropped over the past two weeks, the trend has not turned bearish, and the contract has a considerable support at ₹280. Also, the overall trend is pointing upwards. Hence, the price drop can be considered as an opportunity to go long. So, traders can buy with stop-loss at ₹273 with targets at ₹300 and ₹310.

 

Published on August 18, 2021

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor

You May Also Like