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The natural gas futures on the Multi Commodity Exchange (MCX) witnessed a bounce after touching the support at ₹180 three weeks back. However, the upside was capped at around ₹245 and the rally was largely a corrective one.
The contract resumed the downtrend and is now trading around ₹202. Thus, it has dropped below an important support at ₹210. The price action shows that the contract is likely to fall further from the current levels. While ₹190 is a minor support, we expect the natural gas futures to decline below this level and reach ₹180.
On the upside, the price region of ₹210-215 is a resistance band. Subsequent resistance is at ₹245.
Trade strategy
We suggest traders to go short at the current level of ₹202. Add more shorts when the price rises to ₹210. Place stop-loss at ₹225. When the contract touches ₹190, modify the stop-loss to ₹200.
Book profits at ₹180 as the natural gas futures might again rebound from this support.
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