Natural Gas price has risen well over the last one week. The Natural Gas futures contract on the Multi Commodity Exchange (MCX) rose to a high of ₹334 per mmBtu and then fell sharply to touch a low of about ₹305 on Monday. However, on Tuesday, it has recovered from the low and is currently trading at ₹316 per mmBtu.

Outlook

The outlook is bullish. Natural Gas futures contract has been in a strong uptrend since October this year. Strong supports are at ₹305 and then in the ₹300-₹298 region. The first support level of ₹305 is holding well now. That keeps the broader uptrend intact.

As long as the contract trades above ₹298, the outlook will continue to remain bullish. The MCX Natural Gas futures contract has potential to target ₹355-₹360 in the coming weeks.

This bullish outlook will get negated only if the contract declines below ₹298. If that happens, a fall to ₹280 or ₹260 can be seen. However, such a fall looks less likely as the support around ₹300 is very strong and will be difficult to break.

Trading strategy

Traders can wait for dips and go long at ₹310 and ₹306. Keep the stop-loss at ₹288. Trail the stop-loss up to ₹318 as soon as the contract goes up to ₹326. Move the stop-loss further up to ₹335 when the price touches ₹342.  Exit the long positions at ₹348.