Natural gas futures on November 11 jumped as participants increased their long positions as seen by the open interest. The gas price rally fizzled out after hitting a fresh high of Rs 485 last week on the MCX due to profit booking and ended the week with a gain of 0.72 percent.
The energy commodity traded in the green since morning, tracking the bullish global trend.
On the MCX, natural gas delivery for October soared Rs 14.70, or 3.48 percent, to Rs 436.80 per mmBtu at 1430 hours with a business turnover of 4,018 lots.
Gas delivery for November climbed by Rs 14.70, or 3.39 percent, to Rs 448.40 with a business volume of 2,279 lots.
The value of October and November contracts traded so far is Rs 1,030.39 crore and Rs 107.97 crore, respectively.
MCX Enrgdex increased by 184 points or 2.94 percent at 6,439 at 14:3. The index tracks the real-time performance of MCX Crude Oil and MCX Natural Gas futures.
“Throughout October, the price movement reflects some concerns about high rates in Europe and Asia, but primarily impacted by a negative demand forecast. MCX NG future has remained over Rs 421 after claiming the high of Rs 485. The key support would be near Rs 400 – 61 percent of Fibonacci retracement of the previous incline. The resistance level holds near Rs 445,” said Kshitij Purohit, Product Manager, Currency and Commodities, CapitalVia Global Research Limited.
“MCX Naturalgas future will likely to continue its bullish momentum and traders should keep an eye on buy-on-dips opportunity around Rs 404-406, with the stop loss of Rs 387 for the targets of Rs 434.50,” Purohit said.
Also supporting the price is the weather forecast of warmer than normal in most parts of the United States.
The CFTC data showed that money managers raised their net long positions by 2,015 lots last week.
In its weekly report, Baker Hughes said the number of rigs drilling natural gas in the US remained unchanged for the second straight week at 99 for the week to October 8.
The commodity has been trading higher than 20, 50, 100, and 200-day simple moving averages but lower than the five-day moving average on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 60.76, which suggests a buy in the price.
According to Motilal Oswal, MCX Natural Gas will trade in a range for the session with support at Rs 423.70-420 whereas resistance is at Rs 437-442.
Anand Rathi Investment Services said MCX October natural gas has support at Rs 419.21-413.90 while resistances are at Rs 441.71-450.30.
At 0920 GMT, the natural gas price rose 3.74 percent to $5.77 per mmBtu in New York.
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