The continuous futures of Natural gas on the Multi Commodity Exchange (MCX) has largely been moving in a broad sideways trend since July. But within this range, the contract witnessed a fall of late.
Particularly, the October contract, after facing resistance at ₹285, has now fallen to ₹242 after marking a low of ₹234 on Tuesday. The contract seems to have found support at ₹235. That said, there are resistance levels at ₹244 and ₹254. Subsequent barrier is at ₹265.
Given the prevailing price action, there are chances for the contract to see a rally. However, it should first breach the hurdle at ₹244. In that case, we can expect natural gas futures to touch ₹265 in the near-term.
Trade strategy
We suggest staying out for now. Initiate fresh long positions when the contract surpasses the resistance at ₹244. Place stop-loss at ₹234.
When the contract rallies past ₹254, tighten the stop-loss to ₹246. Book profits at ₹265.