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Natural gas prices fell last week and are now attempting to bounce back. The natural gas futures contract on the Multi Commodity Exchange (MCX) fell to ₹159 per mmBtu before bouncing back to ₹171 per mmBtu. Our forecast last week for a rise to ₹195 and beyond stands negated now.
The MCX natural gas futures contract has been in a downtrend since mid-June. Strong resistances are at ₹174 and ₹179. As long as the contract trades below ₹179, the downtrend will remain intact.
As seen from the chart, the chances are high for the contract to reverse lower from ₹174. That leg of fall may drag the contract down to ₹153 in a week or two.
To turn the outlook bullish, the contract must breach ₹180 decisively and sustain above it. If that happens, then there could be a rise to ₹190-195. But this break requires a strong positive trigger.
Traders can go short now at ₹171 and accumulate at ₹173. Keep the stop-loss at ₹178. Trail the stop-loss down to ₹168 as soon as the contract falls to ₹164. Move the stop-loss down to ₹161 when the price touches ₹159. Exit the short positions at ₹156.
Published on August 7, 2024
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