The price of Natural gas corrected on the back of a bearish head and shoulder price pattern as
outlined in the chart above.
The recent correction took the price to its key support levels placed around the Rs 176 levels. But, the important observation to be made on the chart above is that, the recent pullback from the lower levels found stiff resistance around the neckline of the head and shoulder price pattern.
Also, the bounce back from the support levels were on the back of extremely poor volumes, which clearly indicates that there wasn’t any real buying interest in the counter.
The MACD indicator is also trading in sell mode despite the recent pullback from lower levels. Hence, we expect the prices of natural gas to correct towards Rs 169.50 and/or Rs 164 levels
on a sustained break below the Rs 176 levels.
We recommend traders to sell 50% on a break below Rs 176 levels and again on rallies to Rs 179.25--Rs 180 with a stop loss placed above Rs 183.10 levels for downside targets of Rs 169.50 / Rs 164 levels, expected to be achieved in 3-4 sessions of trade on a break below Rs 176 levels.
MCX NATURALGAS SEP. CONTRACT OPEN Rs 181.20 HIGH Rs 181.30 LOW Rs 177.00 CLOSE Rs 177.
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