Natural gas futures stay positive after 11.7% surge last week

Natural gas futures continued to rise on Monday after climbing 11.7 percent last week on the MCX on increasing demand and supply shortage. The gas price hit a lifetime high of Rs 467.80 in the domestic bourse and touched the 2014 high of $6.28 on the NYMEX last week.

The energy commodity extended gains in the afternoon session after a gap-up start, tracking a bullish overseas trend.

On the MCX, natural gas delivery for October jumped Rs 16.20, or 3.87 percent to Rs 435.30 per mmBtu at 14:30 hours with a business turnover of 5,763 lots.

Gas delivery for November climbed by Rs 16.40, or 3.81 percent, to Rs 446.60 per mmBtu with a business volume of 2,434 lots.

The value of October and November contracts traded so far is Rs 1,054.89 crore and Rs 66.15 crore, respectively.

MCX iCOMDEX Natural Gas Index advanced 192.79 points or 3.82 percent to 5,242.62.

Also read: Natural gas prices up 11.7% this week; choppy trade likely with upward momentum

Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “MCX Natural gas future will likely to continue its sideways movement to marginally bullish momentum and traders should keep an eye on buying opportunities around Rs 412.50-415, with a stop loss of Rs 399.50 for the target of Rs 439.50.”

The price has formed a broadening wedge pattern on intraday chart and it  remained within a channel with sideways momentum, he said.

In its weekly report, Baker Hughes said the number of rigs drilling natural gas in the US remained unchanged at 99 for the week to October 1.

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 67.63, which indicates strength in the price. The trend oscillator MACD is trading above zero line at 25.21 suggesting 'buy'.

“Expect recovery momentum as long as the support of Rs 405 remains hold the downside,” said Geojit Financial Services.

At 09:09 GMT, the natural gas price soared 3.67 percent to $5.82 per mmBtu in New York.

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