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BL Research Bureau
After bottoming out at around ₹180, the continuous contract of natural gas on the Multi Commodity Exchange (MCX) has been on a sharp uptrend. While it seemed to slowdown in May, when it was largely consolidating around ₹220, the contract regained traction and began heading northwards.
However, after reaching ₹283 towards the end of June, it lost some momentum and even though the price did not fall, the trend became flat. That is, until last week it was held within the range of ₹265 and ₹283.
But on Tuesday, the contract broke out of the consolidation range and closed above ₹283, opening the door for further strengthening. The build-up for the breakout started to happen over the past three trading sessions as the contract produced consecutive daily gains.
Considering the above factors, traders can go long on the back of fresh breakout; stop-loss can be at ₹276. The contract can easily touch ₹300, a breach of which can lift it towards ₹310.
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