Natural gas futures climbed on Monday as participants increased their long position as seen by the open interest. The gas prices had marginally fallen 0.29 percent last week on the MCX.
The energy commodity has been trading in the green since morning, tracking the firm overseas trend.
On the MCX, natural gas delivery for October jumped Rs 15.80, or 4.14 percent to Rs 397.20 per mmBtu at 14:30 hours with a business turnover of 7,118 lots.
Gas delivery for November surged Rs 15.50, or 3.97 percent, to Rs 405.70 per mmBtu with a business volume of 2,285 lots.
The value of October and November's contracts traded so far is Rs 753.74 crore and Rs 30.68 crore, respectively.
MCX iCOMDEX Natural Gas Index advanced 195.20 points or 4.25 percent to 4,790.77.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “MCX Natural gas future has been traded back and forth over last week. The price has reversed from the support of 50% Fibonacci support of the previous incline and settled near Rs 377. NYMEX Natural gas future remained on a positive note and closed last week at $5.17 after the release of weaker inventory report released from EIA on Thursday. The key resistance would be near Rs 383 and if the price remained above this mark, we may expect momentum towards Rs 390-400 whereas the support would be near Rs 350.”
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. Also, prices have taken support at 20 MA level on the daily chart which suggests the strength in the primary trend. Any dip can be used as an opportunity to go long in the counter.”
He advised his clients to buy MCX NATURAL GAS OCT in the range of Rs 370 to Rs 380 for the target of Rs 410-430 with a stop loss below Rs 350.
The weather is expected to remain warmer than average throughout most of the United States during the next two weeks.
In its weekly report, Baker Hughes said the number of rigs drilling natural gas in the US fell by 1 to 99 rigs for the week to September 24, the rig count fell for the third straight week.
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 Relative Strength Index (RSI) is at 67.44, which suggests positive movement in the price.
Geojit Financial Services said, “Bullish momentum to continue while prices stay above Rs 352. A close below Rs 342 is a sign of weakness.”
At 09:19 GMT, the natural gas price soared 3.83 percent to $5.39 per mmBtu in New York.
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