October 28, 2024

Natural Gas. Bullish. Go long now and on dips

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Natural Gas price has risen back well over the last one week. The Natural Gas Futures contract (November) on the Multi Commodity Exchange (MCX) has risen from a low of ₹231.30 per mmBtu. It touched a high of ₹259.80 on Friday last week and has come down slightly from there. The contract is currently trading at ₹254 per mmBtu.

Outlook

Resistance for the MCX Natural Gas contract is around ₹258 which is holding well for now. However, the bounce from the last week’s low of ₹231.30 is looking strong. Supports are at ₹251 and ₹243.

Also read: Crude oil futures dip after Israeli attack avoids Iranian oil facilities

As long as the contract trades above these supports, the outlook will be bullish. As such the chances are high now for the contract to breach the resistance at ₹258 in the coming days. Such a break can take the MCX Natural Gas Futures contract higher to ₹290 in the coming weeks.

This bullish outlook will get negated only if the contract declines below 243. If that happens, a fall to ₹230 or even ₹220 is possible.

Trade strategy

Traders can go long now at ₹254. Accumulate on dips at ₹246. Keep the stop-loss at ₹238 initially. Trail the stop-loss up to ₹258 as soon as the contract goes up to ₹265. Move the stop-loss further up to ₹268 when the contract touches ₹275. Exit the long positions at ₹285

Also read: Crude oil down due to concerns over slowing demand in China

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