Natural gas turns bearish
The prices of the natural gas futures on the Multi Commodity Exchange (MCX) in India slumped by 14.6 per cent on Tuesday to end at ₹ 573.6 as its price is based on US prices. The price rally in Europe was because the facility in the US, which is now shut, is a key supplier and there seems to be a drop in supply through the Nord Stream, that runs from Russia to Germany.
The MCX natural gas futures has now turned bearish following the breach of the support band of ₹ 590-600. Moreover, the price has slipped below both 21- and 50-day moving averages and indicators like the RSI and the MACD on the daily chart are now in their respective bearish territory.
Currently trading at around ₹ 570, the nearest support can be spotted at ₹ 535. Subsequent support is at 500. But there could be a pullback to ₹ 610 before falling further. Given the above factors, traders can consider going short at the current level of ₹ 570 and add more shorts when the price rallies to ₹ 610. Place stop-loss at ₹ 630. Tighten it to 600 when the price declines to ₹ 535. Liquidate all the shorts at ₹ 500.
June 15, 2022