MUMBAI: As seen above in daily price chart of MCX Natural Gas March contract, it was trading in the “Lower top Lower bottom formation” for last couple of days. Broadly it was forming a “Head and Shoulder Pattern” and yesterday it has breached the pattern and trading below it. As per the weekly price formation we noticed that prices are in declining mode from last two weeks after making a high of 325.20 levels.
Indicator Analysis
Prices are trading below its 5, 20 and 50 days EMA (Exponential Moving Average) which is negative for the prices. On the oscillator front, 14 day RSI is falling and currently reading at 44 which indicate pessimism. MACD is also trading in negative zone which is also negative for price trend.
Key Levels
Resistance could be seen at 285 levels and then final resistance will be observed at 305 levels. Prices can find support at level of 265 levels and below that strong support is seen at 250 levels.
Looking at negative chart formation coupled with oscillators indicating pessimism, we recommend Sell on rise in MCX Natural Gas March contract.
Positional Call (5 - 7 Days) - Sell MCX Natural Gas March between 283 – 288, SL – 305, Target – 255 / 250.