Natural Gas price has risen back sharply after a corrective fall. The Natural Gas futures contract on the Multi Commodity Exchange (MCX) fell to a low of ₹252.80 per mmBtu by mid-week last week. From there it has risen back week. Indeed, the contract has started this week on strong note by opening with a wide gap-up and surging to a high of ₹275. It is currently trading at ₹272 per mmBtu.

Outlook

The support at ₹252 has held very well. That keeps the broader uptrend intact. The strong rise indicates that the corrective fall has ended. Immediate supports are at ₹268 and ₹261. Below that ₹252-₹251 will be the next important support zone. MCX Natural Gas contract can rise to ₹292-₹293 in a week or two. An eventual break above ₹293 can then clear the way for a rally to ₹330-₹350 over the medium-term.

From a big picture, the level of ₹238 is a crucial support for the Natural Gas contract. The price has to fall below this level to become bearish. But that looks less likely.

Trading strategy

Traders can go long now at ₹272. Accumulate on dips at ₹269 and ₹264. Keep the stop-loss at ₹258 initially. Trail the stop-loss up to ₹275 as soon as the contract goes up to ₹281. Move the stop-loss further up to ₹283 when the price touches ₹287. Exit the long positions at ₹292.