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The November futures contract of natural gas on Multi Commodity Exchange (MCX), which has been inching up since the beginning of October, faced resistance at ₹250. Notably, the price area between ₹247 and ₹250 is a resistance band.
For the last two weeks, even as the contract has been witnessing increased volatility, it is trading within the range ₹235 and ₹250.
The daily relative strength index is hovering in the neutral region since there is a lack of trend.
The moving average convergence divergence indicator in the daily chart, which has been charting an upward trajectory for the past two weeks, is now showing signs of weakness. The above factors show that the contract does not indicate signs of a fresh trend. Hence, unless either of ₹235 or ₹250 is breached, the next leg of trend cannot be confirmed. So, until then, traders can stay on the fence.
A breakout of ₹250 can result in the contract rallying to ₹260 whereas a break below ₹235 can drag the contract towards the subsequent resistance at ₹225.
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