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As expected, the MCX-Natural Gas contract witnessed a corrective rally towards ₹210 last month. The downside pressure has eased as the contract has recovered well after tumbling 27 per cent in just the first two months of this calendar year. The bounce-back last month also suggests that the downtrend could have ended. The 200-day moving average at ₹203 and the 21-day moving average at ₹198 are the key near-term supports. The contract will come under pressure again only if it breaks below the 21-day moving average support decisively. The next targets below ₹198 are ₹190 and ₹185. But such a sharp fall looks less probable. Resistance for the contract is between ₹210 and ₹213 — the 21-week moving average. Inability to break above ₹213 may keep the contract range-bound between ₹203 and ₹213 in the near term. But if the contract manages to breach ₹213 decisively, it can extend its upmove to ₹230 and ₹235 levels thereafter. Such a rally will also confirm a trend reversal. It will also increase the likelihood of the contract revisiting ₹250 levels, going forward.
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