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The upmove in the Natural Gas price is gaining momentum. The Natural Gas (₹395 per mmBtu) futures contract on the Multi Commodity Exchange (MCX) has risen past a key resistance level of ₹390 this week. This break will pave way to test the next resistance at ₹415 in the near-term. The level of ₹415 is an important resistance. Inability to break this hurdle can keep the contract in a range of ₹390-₹415 for some time. However, the bias on the chart is bullish.
As such the chances are high for the MCX-Natural Gas futures contract to break above the resistance at ₹390. Such a break can boost the momentum and take the contract higher to ₹450. Traders with a short-term perspective can go long at current levels. Accumulate longs on dips at ₹390. Keep the stop-loss at ₹478. Trail the stop-loss up to ₹398 as soon as the contract moves up to ₹410. Move the stop-loss further up to ₹407 as soon as the price touches ₹413. Book profits at ₹425. The region between ₹490 and ₹385 will act as a strong support.
The bullish outlook mentioned above will get negated if the contract fails to break above ₹415 from here and then falls decisively below ₹385 subsequently. Such a break can bring the contract under pressure for a fresh fall. In that case the MCX-Natural Gas futures contract can decline to ₹460 and even ₹440 thereafter.
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