Natural gas prices have been on a recovery rally over the last couple of weeks. The natural gas futures contract on the Multi Commodity Exchange made a low of ₹128.50 per mmBtu in mid-February. From there the price has surged to ₹3162 now.
COMMODITY CALL
The broader trend is down. Within this, the current rise seems to be a corrective rally. On the charts, the short-term picture is positive. As such the chances are looking high for the contract to move further up from here. Immediate support is at %160. Below that ₹157 is the next important support. As long as the contract trades above I ₹157 the outlook will remain positive. The contract can move up to ₹170. A break above ₹170 can take it further up to ₹180 in the next few weeks. To turn the outlook negative, the contract has to fall below ₹157. That will indicate the resumption of the overall downtrend and will drag the contract lower.
TRADING STRATEGY Traders with high-risk appetite can go long now at around ₹162. Accumulate on dips at ₹159. Keep a stop-loss at ¥156. Trail the stop-loss up to X164 as soon as the contract moves up to ₹I166. Move the stop-loss further up to ₹I167 when the price touches I169. Exit the longs at ₹170.
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