Natural gas futures, which saw a sharp rally in the second half of December, has seen some moderation in price.

Particularly, the January natural gas futures hit a high of ₹355.4 on December 30. But then it softened and closed at ₹314.1 on Wednesday.

Although the contract slipped below ₹300 last week, it remained below ₹300 only briefly. Thus, the support at ₹300 remains valid.

Below ₹300, there are support levels at ₹290, ₹270 and ₹255. Only a decisive breach of the base at ₹255 will turn the outlook bearish. Until then, the bulls will call the shots.

If natural gas futures resume the rally, it can retest ₹355 in the near-term. If the contract tops this level, it can rise to ₹430, a strong resistance.

Trade strategy

Last week, we suggested buying natural gas futures if the price drops to ₹300. Retain this trade and maintain the stop-loss at ₹280. If the contract touches ₹325, revise the stop-loss to ₹300. On a further upside to ₹340, trail the stop-loss to ₹320. Book profits at ₹350.