The near-term outlook for natural gas price is bearish. The Natural Gas Futures contract traded on the Multi Commodity Exchange (MCX) made a high of ₹400 mmBtu last week and has come off from there. It is currently trading at ₹355. The contract has been struggling to break above the psychological ₹400 mark since the beginning of the year. This leaves the chances high for the contract to fall towards ₹320-₹315 in the next one-two weeks. Support is at ₹330. A break below it will trigger the above-mentioned fall. Resistances are at ₹380, ₹390 and ₹400.
Traders with a short-term perspective can go short at current levels. Accumulate shorts on a rise at 375. Keep the stop-loss at ₹393. Trail the stop-loss down to ₹348 as soon as the contract falls to ₹337. Move the stop-loss further down to ₹338 as soon as the contract touches ₹331 on the downside. Book profits at ₹325. The MCX Natural Gas futures contract will have to breach ₹400 decisively in order to negate the above-mentioned bearish view. In that case the contract can rise to ₹440-₹450. On the other hand, if the contract breaks below ₹315, the downside pressure can intensify. Such a break can then drag the contract down to ₹300 and ₹280 thereafter. Overall, ₹315-₹400 is the broad range of trade. Within this the contract can now come down towards the lower end. A breakout on either side ₹315-₹400 will then determine the next leg of move.