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Natural Gas prices have been stuck in a very narrow range over the last couple of weeks. The MCX Natural Gas Futures contract on the Multi Commodity Exchange (MCX) has been stuck in between ₹165 and ₹185 per mmBtu. Within this range, the contract is currently trading at ₹172 per mmBtu.
Outlook
The overall trend is down. Support is at ₹166-165. Resistances are at ₹183 and ₹185. The bias remains negative. As such the Natural Gas Futures contract can break below ₹165 if not immediately but eventually. Such a break can drag the price down to ₹150 initially.
It will also strengthen the overall downtrend that has been in place since August 2022. From a big picture, the Natural Gas contract has room to tumble towards ₹120 over the medium-term.
The contract will get some breather if it manages to break the current range above ₹185. In that case a relief rally to ₹195-200 is possible. However, the outlook will turn bullish only if it breaches ₹200 decisively. That looks less likely.
Trade strategy
The trailing stop-loss placed at ₹185 on the short positions taken at ₹190 has been hit.
Traders can take fresh shorts now. Accumulate shorts at ₹182. Keep the stop-loss at ₹189. Trail the stop-loss down to ₹169 as soon as the contract falls to ₹162. Move the stop-loss further down to ₹158 when the contract touches ₹154 on the downside. Exit the short positions at ₹152.
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