Natural gas futures (April contract) on the Multi Commodity Exchange (MCX) has largely been flat over the past few sessions. But it has been hovering around support. That said, the broader trend is bearish. So, now there is a tug of war between the bulls and the bears.

The April futures has a support band between ₹148 and ₹150. If bulls gain traction on the back of this support, the contract can move up towards the nearest resistance at ₹165. Subsequent resistance is at ₹176. A breach of this can turn the short-term outlook positive.

But in case the contract slips below the support at ₹148, we are likely to see another leg of downtrend. The nearest support levels can be spotted at ₹130 and ₹120.

Trade strategy

Last week, we recommended buying natural gas futures (April contract) at ₹156 with a stop-loss at ₹145. Retain this trade. When the contract rallies past ₹165, raise the stop-loss to ₹158. Book profits at ₹176.

 If the above stop-loss is hit, it could mean that the support at ₹148 is breached. In this case, one can consider going short with a stop-loss at ₹152. Target for this trade can be at ₹130.