Technical Outlook & Trading Strategy:-
The price pattern of Natural Gas since 19th Apr, 2011 is taking shape of a bearish head and shoulder pattern on the daily charts.
The formation of this price pattern is a sign of distribution and indicates that the future price
action of an index/stock/commodity will trade with a negative bias.
The neckline support for the said pattern is placed at the Rs 184.70 levels. A sustained break below the 200 day moving average placed at the Rs 193.90 levels will see the prices of Natural gas heading down towards the neckline support level of Rs 184.70 levels.
We recommend traders to sell 50% on a break below Rs 193.90 levels and 50% on rallies to Rs 198—Rs 199 levels with a stop loss placed above Rs 200.30 levels for downside targets of Rs 188 and followed by Rs 184.75 levels.
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