Natural gas futures traded firm on June 28 as participants trimmed their position as seen by the open interest. The gas prices climbed Rs 20.6 or 8.63 percent last week on the MCX.
The energy price traded in the green after a gap-up start tracking the firm global trend.
On the MCX, natural gas delivery for July jumped by Rs 2.30, or 0.88 percent, to Rs 263.50 per mmBtu at 14.40 hours with a business turnover of 22,154 lots.
Gas delivery for August gained Rs 2.80, or 1.08 percent, to Rs 262.90 per mmBtu with a business volume of 1,521 lots.
The value of July and August contracts traded so far is Rs 799.71 crore and Rs 41.42 crore, respectively.
MCX iCOMDEX Natural Gas Index soared 28.02 points or 0.88 percent to 3,209.80.
NS Ramaswamy, Head of Commodities, Ventura Securities said, “As per our last week’s view, MCX NATURAL GAS prices crossed the level of Rs 250. Prices are heading with strong momentum on the higher side. We expect prices heading towards Rs 300 level in coming sessions.”
He advised his clients to buy MCX NATURAL GAS JUL in the range of Rs 250-255 for the target of Rs 275-290 with a stop loss below Rs 235.
Total US consumption of natural gas fell by 1.8 percent compared with the previous report week, according to data from the EIA.
As per US CFTC data, natural gas speculators raised their net long US futures and options positions by 3,784 contracts to 289,763 for the week ended June 22.
In its weekly report, Baker Hughes said the number of rigs drilling natural gas in the US rose by 1 to 98 rigs for the week to June 25.
Technicals
The commodity has been trading higher than 5, 20, 50, 100 and 200-days' simple moving averages and exponential moving average on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 75.46, which suggests overbought levels in the price.
At 0921 GMT, the natural gas price was up 0.65 percent at $3.54 per mmBtu in New York.
Trading Strategy
Sriram Iyer, Senior Research Analyst at Reliance Securities
Technically, NYMEX Natural gas could trade in a range of $3.400-3.650 levels. On the domestic front, MCX Natural Gas July holds strong support near Rs 258-255 levels whereas resistance is at Rs 263-267 levels.
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