The continuous futures contract of natural gas on the Multi Commodity Exchange of India (MCX) has fallen 3 per cent to trade at ₹311 per mmBtu on Monday, after registering an intra-day high at ₹331.

This fall is in line with the decline in global natural gas which has slumped 3.2 per cent to $4.2 on Monday, following a sharp 14.8 per cent jump in the previous week.

As the commodity had witnessed a sharp rise in price and tests a key long-term resistance at around $4.5, a near-term corrective decline is possible in the form of profit-booking.

Both medium and short-term trend are up for the commodity.

On the global front, the natural gas can extend the corrective decline and test the immediate support at $4.16. A further fall can test the next crucial short-term support at $4.

An upward reversal from either of these supports can take the commodity price higher to $4.4 and then to $4.5 levels.

On the domestic front, the commodity price has been in a medium-term uptrend since it took support at around ₹180 in early April this year. Short-trend is also up.

The contract trades well above the 21- and 50-day moving averages.

However, the contract can extend the corrective decline and tests support at ₹310. A fall below this level can test next support at ₹300. An upward reversal from the second support can take the contract higher to ₹321 and then to ₹331 levels.

Having said that, an emphatic plunge below the vital base level of ₹300 can pull the contract down to ₹290 and then to ₹280 over the short term.

Traders can initiate fresh short positions with a fixed stop-loss at ₹322 levels.

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