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Natural Gas Technical Outlook 01 to 05.09.2014

Natural gas September contract inched 15 rupees up to settle at 246.90. Natural gas took strong support near 226 zones during bearish attempts and nicely recovered to settle near 247 zones which is very crucial resistance. 10 weeks SMA has fallen below 20 weeks SMA and 50 weeks SMA and 20 weeks SMA is approaching 50 weeks SMA from above that indicates weakening bullish momentum on longer term picture. MACD has fallen below line zero with bearish cross also indicates weakness. Stochastic has recovered from oversold territory and it may support bulls in coming days. Immediate resistance is now seen near 249 any sustained move above that level would bring some charm and then we will see a rally towards 257-268 zones. Stability below 249 would remain bearish for this counter and any failure below 240 would trigger some weakness and it will try to retest to 233-230 zones. Key support would remain at 226 and failure of that level would bring 220-215 on cards.

Natural Gas trading range for the week is expected among the key support at 239 and resistance at 249.

Recommendation:

·         This week again buying Natural gas on declines around 242-240 with stop loss below 239 for targeting 247-255 and more upside might be appropriate.

·         In alternative scenario buying above 249 with stop loss below 246 for targeting 255-260 and more upside might be appropriate.

·         Selling below 239 with stop loss above 243 for targeting 234-230 and more down side might be appropriate. 

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