Natural gas futures on October 12 fell for the fourth successive day, dropping below Rs 400/mmBtu as participants raised their short bets as seen by the open interest. The gas price had fallen 4 percent yesterday on the NYMEX.
The energy commodity slipped into the red after a gap-up start in the afternoon session, tracking weak global cues.
On the MCX, natural gas delivery for October dipped Rs 6.80, or 1.68 percent, to Rs 398.80 per mmBtu at 1435 hours with a business turnover of 4,846 lots.
Gas delivery for November dropped by Rs 5.60, or 1.34 percent, to Rs 412.30 with a business volume of 2,296 lots.
The value of October and November contracts traded so far is Rs 1,304.68 crore and Rs 98.61 crore, respectively.
MCX Enrgdex slides by 33 points or 0.52 percent at 6,318 at 14:38. The index tracks the real-time performance of MCX Crude Oil and MCX Natural Gas futures.
"Natural gas may remain volatile as market players wait to see the result of efforts to improve supply. We suggest waiting for corrective dips to create a fresh long position," said Kotak Securities analysts.
While the focus so far has been on the supply side, investors are worried that sustained higher prices may impact demand as well, the brokerage firm added.
The gas price plummeted to a 2-week low after the weather forecast showed above-normal temperatures across most of the US over the next 60 days.
As per National Oceanic and Atmospheric Administration, there are two storms in the Atlantic near the Caribbean that may become tropical cyclones in the next 48 hours.
Technicals
The commodity has been trading higher than 50, 100, and 200-day simple moving averages but lower than the 5 and 20 days' moving averages on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 52.17, which suggests a neutral movement in the price.
Anand Rathi Investment Services said MCX October natural gas has support at Rs 392.42-378.63 while resistances are at Rs 428.52-437.04.
At 0937 GMT, the natural gas price slipped 0.97 percent to $5.29 per mmBtu in New York.
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