Comments
The Natural Gas continuous contract on Multi Commodity Exchange of India (MCX) has been in a sideways consolidation phase since October 2020 in the wide band between ₹180 and ₹240. In mid-February this year, the contract tested the upper side at ₹240 and then dropped on the back of selling interest. The contract has been in a short-term downtrend since then. It now trades at ₹183.8 mmBtu.
However, the contract is now testing significant support as well as the 200-day moving average at around ₹180.
Although the daily relative strength index is displaying positive divergence, implying a trend reversal is possible, the contract lacks bullish momentum.
Therefore, traders with a short-term perspective should tread with caution. An emphatic breakthrough of the key support at ₹180 will strengthen the short-term downtrend and pull the contract down to ₹168 and then to ₹160 over the short term.
Conversely, a conclusive rally above the immediate resistance level of ₹200 is needed to signify trend reversal. In that case, the contract can extend the up-move to ₹210 and then to ₹220 levels.
Next key barrier is the upper boundary which is ₹240.
A decisive break above ₹240 is required to bring back bullish momentum and can pave way for a up-move to ₹260 over the medium term.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.