Natural gas futures surged to a fresh 52-week high and highest level since November 2008 on the MCX as participants raised their bets as seen by the open interest. The gas prices had surged 11.05 percent last week on the MCX.
The energy commodity traded in green after a gap-up start in the afternoon session, tracking the firm overseas trend.
On the MCX, natural gas delivery for September gained Rs 3.80, or 1.18 percent to Rs 325.30 per mmBtu at 14:27 hours with a business turnover of 18,441 lots.
Gas delivery for October soared Rs 3.80, or 1.17 percent, to Rs 329.50 per mmBtu with a business volume of 4,433 lots.
The value of September and October's contracts traded so far is Rs 747.69 crore and Rs 74.65 crore, respectively.
MCX iCOMDEX Natural Gas Index increased 47.42 points or 1.21 percent to 3,956.57.
NS Ramaswamy, Head of Commodities, Ventura Securities said, “MCX natural gas prices are trading above all the key averages on weekly and daily charts. The RSI indicator on daily and weekly charts is also showing the strength in momentum on the upside. We may expect the prices to reach up to Rs 350 level in coming days.”
He advised his clients to buy MCX natural gas September in the range of Rs 305-310 for the target of Rs 340-350 with a stop loss above Rs 290.
In its weekly report, Baker Hughes said the number of rigs drilling natural gas in the US was unchanged at 97 rigs for the week to August 27.
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 70.97, which suggests a buy in the price.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “The key support in MCX September contract is at Rs 311 and if the price remains above this level, we may expect sustainable bullish momentum on upcoming sessions and price may head towards Rs 350. The key resistance is at Rs 340-350.”
At 09:09 GMT, the natural gas price was up 0.91 percent at $4.42 per mmBtu in New York.
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