Natural gas futures price traded firm on July 26 as participants rolled over their bullish bets as seen by the open interest. The gas price had soared Rs 28.4 or 10.38 percent last week on the MCX.
The energy commodity recouped earlier losses and traded in the green after a gap-down start, tracking the bullish global trend.
On the MCX, natural gas delivery for July gained Rs 1.30, or 0.43 percent, to Rs 303.30 per mmBtu at 14:25 hours with a business turnover of 4,170 lots.
Gas delivery for August jumped Rs 1.20, or 0.40 percent, to Rs 302.10 per mmBtu with a business volume of 14,318 lots.
The value of July and August's contracts traded so far is Rs 138.23 crore and Rs 599.15 crore, respectively.
MCX iCOMDEX Natural Gas Index rose 15.88 points or 0.43 percent to 3,693.27.
NS Ramaswamy, Head of Commodities, Ventura Securities said, “As per our last week’s view, MCX NATURAL GAS prices traded positive for the entire week. Our first target of Rs 300 is almost reached in the counter. Going forward, the primary trend is likely to extend on the higher side and we may see prices heading towards Rs 350 level in the coming days. Any dip in the prices can be used as an opportunity to create a long position and take advantage of the primary uptrend.”
He advised his clients to buy MCX NATURAL GAS AUG in the range of Rs 285-Rs 290 for the target of Rs 330-350 with a stop loss below Rs 265.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “The price is trailing over the support of 15-SMA of intraday chart. Natural gas has jumped 63% from the start of the year and 135.7% from a year ago, with prices back to levels they traded at in December 2018 when gas last traded above $4. Natural gas stocks have lagged the commodity they track by almost 15 percentage points so far this year and a whopping 95 percentage points over the last 12 months.”
The gas price has been supported by warmer than normal weather in most parts of the United States which is likely to boost demand for air conditioning.
In its weekly report, Baker Hughes said the number of rigs drilling natural gas in the US was unchanged at 104 rigs for the week to July 23.
Technicals
The commodity has been trading higher than 5, 20, 50, 100 and 200 days simple moving averages and exponential moving averages on the daily chart. The momentum indicator RSI is at 77.95, which suggests further upside in the price.
At 09:10 GMT, the natural gas price was up 0.27 percent at $4.05 per mmBtu in New York.
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