Looking at the past one-year trend of the futures of natural gas, the major direction is clearly up although it witnessed a corrective decline in November and December.
The March series on the Multi Commodity Exchange (MCX) picked up momentum in mid-January this year and has been on a rise since then.
But since registering a high of ₹222.2 before a couple of weeks, the contract has been softening. However, the decline seems to have stopped just above the critical support level of ₹200. Until the price stays above this base, the bias will be bullish. Substantiating this view, the relative strength index, and the moving average convergence divergence indicators on the daily chart, though have retreated from their peaks, still lies in their respective bullish territories.
Yet, on the other hand, the average directional index has seen a drop over the past couple of weeks, indicating that the contract is losing momentum on either direction, hinting at the possibility of a consolidation phase before establishing the next leg of trend.
Going forward, the contract will be oscillating between the key levels at ₹200 and ₹215 in the near-term. So, traders can stay on the fence until either of these levels are breached. Resistances above ₹215 are at ₹222 and ₹230 whereas supports below ₹200 can be seen at ₹192 and ₹184. But traders with higher risk appetite can buy at current levels with stop-loss at ₹192.