Natural gas futures (May contract) on the Multi Commodity Exchange (MCX) has been on an upswing over the past few sessions. The chart hints at more rally, so participants can remain on the long side of the trade.
The contract closed above the resistance at ₹178 last Friday. Currently hovering around ₹181, it is expected to appreciate towards the ₹197-200 price band in the near term. But it could retest ₹178 before rising again.
That said, if natural gas futures break below the support at ₹178, the outlook may turn weak, with the contract dropping to ₹170 or even ₹160. However, as it stands, the contract displays bullish bias.
Trade strategy
Last week, we recommended buying natural gas futures (May series) at ₹175. Retain this trade but raise the stop-loss to the entry price — that is, ₹175 — so that the position is protected. Going ahead, tighten the stop-loss further to ₹180 when the price touches ₹190. Book profits at ₹196.
Traders can also consider fresh buys with a stop-loss at ₹175. After initiating, follow the above modifications when the contract rallies.
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.