On the technical front, we find that despite significant selling pressure below 156/157 level we have witnessed a recoiling process since the Natural Gas futures has already completed its rounding bottom pattern as a cake walk. There is no doubt that bulls are facing the problem to clear the 195/196 resistance level as we have witnessed 2 times earlier also but on Friday we have seen panic buying from 183.20 to 192.30 level instantly, which created the hope the breakout of the mentioned resistance level this time.
The price has been finding continuous support at the level of 156/157 level which makes this level too attractive to go long as the Natural Gas futures have already formed a “Golden Cross” in an hourly chart; which confirms the continuity of upward moves from the current levels. There is no doubt that a daily closing above 196 levels will confirm the advent of upcoming level of 226 level and furthermore. Natural gas has rallied sharply in last few days as cold weather engulfed parts of US increasing heating demand. Changing weather will result in sharp upward move during the coming weeks.
On the international chart the 2.7000 level is key resistance level or breakout level and it seems like bulls will clear this level this time, let’s wait and watch for the coming week. There will be clearer picture in the coming week as price as arrived at crucial resistance level. Presently bulls have cleared all the major and minor EMA lines on MCX as well as international chart also so odds are in favor of bulls and daily to weekly bias remains bullish on the NG as long as 170 level remains intact on daily chart.
Bulls are controlling the game for the time being and the approach of bulls is very clear that they want to test the 226 and 264 level in the coming weeks. Well the coming week seems as very crucial to decide the trend as we can notice that it has arrived at very sensitive zone if it gives daily closing above 196 level then there is high probability that bulls will test the 226 and 264 level in the coming week on contrary if bulls unable to handle the support of 200 SMA line and go below the 175 level then we may see sell off towards 156/155 level once again.
The way bulls are pretending it seems like they are pulling up their socks to win the battle once again and it looks like it is ready to become the sky rocket. The RSI is also supporting the bulls from positive territory and a bullish crossover has been occurred on the MACD indicator, which is a signaling that further bullish sentiments are much awaited. The 175 level can be considered as key support level followed by 155 level whereas 226 will be a strong support level followed by 264.
Trade idea:- In the current situation some correction can’t be ruled out but that should be taken as buying opportunity. Aggressive Traders are advised to go for long at. Current levels or at any dip with reversal and positional traders should enter above 206 level for the target of 227 and 250 and 264 levels with the strict stop loss of 170.