Natural gas futures have been on a downtrend since June 20. Extending the decline, the August contract lost 5 per cent on Monday to close at ₹256.7/mmBtu. It is currently hovering around ₹259.
The price action is bearish, and the probability of further decline is high. However, there is notable support at ₹250, where the sellers are likely to exit. This can at least lead to a corrective rally if not a bullish trend reversal.
Such a rebound can take natural gas futures to ₹280. A rally past this level can turn the short-term outlook positive and lift the contract to ₹300 and ₹325.
On the other hand, if natural gas futures breaches the support at ₹250, we are likely to see another leg of downtrend. Support below ₹250 can be spotted at ₹220 and ₹200.
Overall, from the current level, we expect the contract to decline to ₹250 and then see a potential recovery to ₹280.
Trade strategy
Buy natural gas futures (Aug) if its price dips to ₹252. Place initial stop-loss at ₹240. When the contract rises to ₹265, trail the stop-loss to ₹252. On a rally to ₹275, tighten the stop-loss further to ₹268. Book profits at ₹280.
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Published on August 5, 2025
