Natural gas futures edged lower for the third day on September 20 due to the long unwinding of positions by participants after a sharp rally in the last few days. The gas prices had risen 4.05 percent last week on the MCX.
The energy commodity has been trading in the red since morning, tracking the bearish global trend.
On the MCX, natural gas delivery for September tumbled Rs 14.20, or 3.71 percent to Rs 368.20 per mmBtu at 14:31 hours with a business turnover of 6,151 lots.
Gas delivery for October slumped Rs 14, or 3.63 percent, to Rs 371.90 per mmBtu with a business volume of 4,014 lots.
The value of September and October’s contracts traded so far is Rs 1,308.37 crore and Rs 225.13 crore, respectively.
MCX iCOMDEX Natural Gas Index plunged 163.83 points or 3.52 percent to 4,485.92.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “MCX Natural gas future has continued its strong bullish momentum in the first half of last week, breaking above the all-time high level and made a high at Rs 415. The price has been trading in the Ascending Broadening Wedge Pattern and the past few sessions remained within a channel with some corrections.”
In its weekly report, Baker Hughes said the number of rigs drilling natural gas in the US fell by 1 to 100 rigs for the week to September 17, the rig count fell for the second successive week.
Also read: Natural gas prices up over 4% this week
The commodity has been trading higher than 20, 50, 100, and 200 days’ simple moving averages and exponential moving averages but lower than the 5-day simple and exponential moving averages on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 61.17, which suggests buying at the price.
“MCX Natural gas future will likely to continue its bullish momentum and traders should keep an eye on Buy-on-dips opportunity around Rs 375, with the stop loss of Rs 365.50 for the target of Rs 388-395,” Purohit said.
Geojit Financial Services said, “Upticks to continue while prices stay above Rs 345. A close below the same is a weak signal.
At 09:15 GMT, the natural gas price slipped 1.72 percent to $5.01 per mmBtu in New York.
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